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The National
26-04-2025
- Business
- The National
Dubai reports rise in multi-year tenancy contracts as rents increase
Dubai is recording an increase in multi-year rental contracts as more tenants are planning to stay in the city for longer and seek to secure favourable lease terms, a new report has found. 'These tenants value the ability to lock-in their rent for better financial planning, while landlords benefit from reduced turnover and fewer vacancy periods,' said Rupert Simmons, directors of leasing at real estate company Betterhomes. 'Longer-term commitments are a positive indicator of a maturing rental market.' One- and two-cheque payments increased by 10 per cent and 11 per cent, respectively, on a quarterly basis in the first three months of 2025, the data found. This trend is potentially driven by tenants aiming to secure more favourable lease terms in a competitive environment and indicates a growing presence of higher-income demographics entering the market, according to the Betterhomes report. While multiple cheque payments remain a common practice, tenants with higher budgets tend to show greater flexibility in their payment terms, the research revealed. Renewal contracts continued to dominate rental activity, with 64 per cent of all leases in the first quarter being renewals, the highest proportion in the past year. This shows that tenants choose to remain under the protection of the rental price index as they see better value by staying put, rather than re-entering the market, the report said. Dubai Marina, Jumeirah Lakes Towers and Downtown Dubai were the top leasing communities for apartments, while family-friendly communities such as The Springs, Dubai Hills Estate and Tilal Al Ghaf were most popular for leasing townhouses, Betterhomes revealed. 'The strongest increase in demand was seen in the townhouse segment, pointing to increased interest in this housing type,' the report said. A growing number of long-term tenants are choosing to purchase property, driven by relatively lower mortgage payments compared to rental costs. 'In today's market, the gap between renting and owning has never been narrower. With mortgage rates stabilising and property values on the rise, buyers are seizing the opportunity to turn monthly payments into long-term equity. Ownership in Dubai is a strategic financial move,' said Jeffrey De Souza, head of mortgages at Lomond, a mortgage service provider. To put this into perspective, consider a two-bedroom property in The Springs, typically priced at around Dh3 million ($816,882). The annual range for such a property ranges between Dh150,000 and Dh200,000, according to the Real Estate Regulatory Agency's rental index calculator, the Betterhomes report explained. A 25-year mortgage on a Dh3 million property at an interest rate of 3.99 per cent would result in monthly payments of approximately Dh12,655, or Dh151,860 annually, highlighting the financial advantage of buying over renting, the report said. Dubai's property market has been benefiting from government initiatives such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE's economy on diversification efforts. The city's real estate market recorded 42,422 sales transactions in the first quarter of 2025, a 23 per cent increase compared with the same period last year, according to the Dubai Land Department. However, transaction volumes declined by 10 per cent compared with the particularly active final quarter of 2024. The off-plan sector was a major contributor, accounting for 24,942 transactions, a 25 per cent increase annually, and representing 59 per cent of all deals. The overall value of real estate sales in Dubai recorded a 29 per cent year-on-year increase, touching Dh114 billion in the first quarter of this year, according to the DLD data. Apartment sales rose 14 per cent year-on-year to 32,237 transactions, with their total value up 12 per cent to Dh60.8 billion. Villa transactions jumped 65 per cent to 10,185, and value rose by 56 per cent to Dh53.4 billion. 'What's notable is the shift to more end-users and mortgage-backed buyers, indicating deeper confidence in Dubai as a place to live and invest long-term,' said Christopher Cina, director of sales at Betterhomes. While 7,848 units were handed over in the first quarter of 2025, a considerable volume of new properties is expected to be delivered in the coming years, according to data from Property Monitor. There is expected to be a notable peak in anticipated completions in 2026, with nearly 97,000 units forecasted. 'This substantial influx of new supply over the medium term will be a key factor to watch, alongside ongoing demand dynamics, as it may influence both property prices and rental rates,' the Betterhomes report said. Projected supply remains elevated through 2027 and 2028, before tapering off towards 2029, the report added.
Arabian Business
22-04-2025
- Business
- Arabian Business
Dubai real estate market grows 23% in Q1 2025 as villa sales lead surge: Report
Dubai's residential real estate market maintained its growth trajectory in the first quarter of 2025, recording significant increases in both transaction volumes and values, according to new figures released by Betterhomes. Data from the Dubai Land Department (DLD) showed total property sales transactions rose by 23 per cent year-on-year to 42,422 deals during the first three months of the year. The value of these transactions reached AED114 billion, a 29 per cent increase compared to the same period in 2024, the report said. Villa sales in Dubai jump 65% as demand for larger homes increases Apartments continued to represent the largest segment by volume, accounting for 32,237 transactions, a 14 per cent rise from the previous year. Villas, however, recorded the strongest growth, with transactions climbing 65 per cent year-on-year to 10,185 deals. The total value of villa sales increased by 56 per cent to AED53.4 billion. The off-plan sector remained a dominant force in the market, making up 59 per cent of all transactions, with 24,942 deals, reflecting a 25 per cent year-on-year increase. However, within the prime property category, a notable shift was observed as off-plan transactions fell by 30 per cent while secondary market prime sales increased by 77 per cent. Betterhomes reported that average selling prices rose by 28 per cent across the market. Villas saw the most significant price movement, with a 92 per cent increase in average selling prices. Mortgage-backed purchases also continued to grow, now comprising 57 per cent of all Betterhomes sales. Christopher Cina, Director of Sales at Betterhomes, said: 'Q1 2025 has reaffirmed Dubai's resilience and continued global appeal, transaction volumes, values, and lead generation all remain high across the business. While we saw a seasonal adjustment after a record-breaking Q4, demand for villas, townhouses, and prime properties continues to grow. What's notable is the shift to more end-users and mortgage-backed buyers, indicating deeper confidence in Dubai as a place to live and invest long-term.' The report revealed a 14 per cent annual rise in buyer enquiries and a 51 per cent increase compared to the last quarter of 2024. Townhouse leasing enquiries in Dubai climb 199% in early 2025 Townhouses experienced the most notable growth in demand, with a 64 per cent quarter-on-quarter increase in buyer leads. Betterhomes also noted a shift in the buyer profile during the first quarter. End-users now represent 50 per cent of the market, a 22 per cent increase from the previous quarter. Mortgage transactions increased by 21 per cent year-on-year and 13 per cent quarter-on-quarter. Jeffrey De Souza, Head of Mortgages at Lomond, said: 'In today's market, the gap between renting and owning has never been narrower. With mortgage rates stabilising and property values on the rise, buyers are seizing the opportunity to turn monthly payments into long-term equity. Ownership in Dubai is a strategic financial move.' In the rental market, Betterhomes recorded a 36 per cent annual increase in tenant leads, driven by population growth and families seeking upgraded accommodation. The townhouse segment saw a 199 per cent rise in leasing enquiries year-on-year, while apartment leads increased by 39 per cent. Tenant demand for Dubai rentals increases 36% in first quarter of 2025 Rupert Simmonds, Director of Leasing at Betterhomes, added: 'With tenants planning to stay in Dubai for longer than ever before, we are witnessing a rise in multi-year rental contracts. These tenants value the ability to lock in their rent for better financial planning, while landlords benefit from reduced turnover and fewer vacancy periods.' Luxury property transactions, particularly in the secondary market, continued to rise. Prime property transactions above AED15 million increased by 44 per cent year-on-year, while secondary market sales in this category climbed 77 per cent. Popular areas included Palm Jumeirah, Emirates Living, and Downtown Dubai. Looking ahead, Property Monitor data indicated 7,848 new residential units were completed in Q1 2025, with a peak of nearly 97,000 units expected in 2026. Off-plan launches continue to support market supply, with significant projects in areas such as Zabeel, Dubai Creek Harbour, and Dubai South.
