Why are Dubai tenants rethinking their next move?

Arabian Business

a day ago

Dubai's rental market is undergoing a subtle but important recalibration. Once considered a transient city where renting was the default choice, 2025 is telling a more nuanced story. Tenants are thinking long-term, with aspirations for ownership, as market forces shape a different future for residents.
According to Bayut 's H1 2025 Rental Market Report, the city has experienced stabilisation in rental growth across key communities, particularly in the affordable and mid-tier segments. Prime areas like Downtown Dubai, Dubai Marina and Palm Jumeirah have moderated their rental prices, making room for realistic tenant expectations and lease negotiations.
Up-and-coming districts such as Dubai South, Dubailand and Al Warsan are attracting a new generation of renters looking for value, community amenities and connectivity.
Maturing market
Bayut's insights highlight Dubai as a maturing ecosystem with rents stabilising, rather than declining demand. Data from the first half of 2025 reveals varying rental growth across all property segments. Affordable properties saw rent increases of up to 9%, mid-range rentals rose between 1% and 6%, while luxury properties recorded the steepest rental surges of up to 21%. Although rents continue to climb, the pace has significantly decelerated compared to the more than 50% surges recorded in 2024.
Stabilising prices are sometimes mistaken for weakening demand, but that's not the case here. Instead, the current trend reflects a rental market that is becoming less volatile and better aligned with Dubai's long-term urban development goals. The rise in property handovers, particularly across suburban master developments, has played a key role in balancing supply and demand, providing renters with more options and stronger negotiating power.
Data from the report further revealed that affordable areas such as Al Nahda, Bur Dubai and International City continue to witness strong rental activity, driven by steady demand from working professionals and new residents. In the mid-tier segment, Jumeirah Village Circle (JVC), Business Bay and Al Barsha remain popular due to their proximity to business hubs and family-friendly infrastructure.
Buying rentals
While residential rentals remain on the rise overall, some units, particularly in the mid-tier and luxury segments, have seen decreases of 1% to 13%. Interestingly, Bayut's data shows a corresponding increase in the sale prices for similar units within these same categories. For instance, rental costs for 4-bed luxury villas dropped by 1% to 9%, while sale prices for similar properties rose by 2% to 8% during the first half of 2025. This could be attributed to a shift in demand, resulting from long-term renters reconsidering their options and moving towards property ownership.
This transition is being further encouraged by the Dubai Land Department 's First-time Homeowner Initiative, designed to help UAE residents shift from renting to owning. Offering benefits such as reduced registration fees, simplified mortgage procedures and access to verified listings through regulated platforms, the programme is nudging long-term tenants to view homeownership as a practical and even more appealing alternative.
'Renting in Dubai has always been dynamic, but what we're seeing now is a real shift in mindset,' said Haider Ali Khan, CEO of Bayut and dubizzle, CEO of Dubizzle Group MENA and Board Member of the Dubai Chamber of Digital Economy. 'Tenants are thinking long-term, weighing up rental options against homeownership more seriously than ever before. With better transparency, evolving policies and more choice across price points, renters today are more empowered—and that's a great thing for the market as a whole. At Bayut, our role is to keep providing the insights and tools that help people make the best possible decisions, whether they're renting their first apartment or buying their forever home.'
While this doesn't spell the end of renting in Dubai, it does signal a transformation in its purpose and perception. Renting is no longer just a stepping stone; for many, it's a lifestyle choice. But for a growing cohort, particularly those who have spent several years in the UAE and plan to stay, the cost-benefit of ownership is becoming increasingly compelling.
Rental landscape
With a growing demand for house purchases, landlords, especially those owning properties in the mid-tier and luxury segments, will need to rethink their position strategies. Flexible leasing terms, semi-furnished options, energy-efficient upgrades and community-centric living are some of the key features that will play a major role in tenant retention.
As per the Bayut report, there is a noticeable rise in demand for rental properties offering amenities like gyms, co-working spaces and pet-friendly features, particularly among younger tenants and remote workers. BayutGPT data reinforces this trend, with nearly 10% of user queries focusing specifically on amenities. Once considered to be luxury amenities, these features have now become the standard.
New properties are reported to have higher demand, as per the report. Older buildings in previously sought-after districts are facing lower demand unless they're competitively priced or upgraded. In contrast, new developments, particularly those close to upcoming metro stations or major roadways, are commanding stronger demand and rents.
Dubai's dynamic future for rentals
Looking ahead, Dubai's rental market will remain dynamic, but it will not be immune to broader shifts in homeownership patterns, demographic trends and macroeconomic factors. The projected delivery of over 81,000 units in 2025 alone means supply will play a key role in moderating rental prices, particularly in oversupplied segments.
In many ways, the future of renting in Dubai is not about loss, it's about evolution. Renting will still serve millions of residents across income tiers, but it will coexist with a growing culture of ownership that's been made possible by thoughtful policy, competitive pricing and greater access to data-led decision-making.
For property seekers, this means more choice, more clarity and more control. For the market, it means a stable, sophisticated rental environment that complements, not competes with the rise of homeownership in Dubai.