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Dubai Rents Expected to Surge by 10% in Late 2024

Posted by main.admin on June 24, 2024
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Dubai’s rental market is poised for another significant surge in the latter half of 2024, with industry experts forecasting a 10% increase. This follows a similar rise in the first half of the year, marking a continued trend in the emirate’s rental market growth.

Market Trends and Predictions

Jacob Bramley, senior leasing manager at Betterhomes, noted the steady growth pattern, stating, “With a 10% increase at the beginning of 2024, we anticipate a similar rise for the remainder of the year. With more property handovers expected in the third and fourth quarters, we foresee a consistent 5-10% growth over the next six months.”

Lewis Allsopp, chairman of Allsopp and Allsopp, echoed this sentiment, projecting a shift towards more gradual rental growth in the latter part of 2024 and into 2025. “Over 10,000 new units are expected in Q2 alone, addressing the rising demand from a growing population,” Allsopp said. “Dubai welcomed over 30,000 new residents in the first five months of 2024, including more than 6,700 millionaires, which will further fuel both population and real estate market growth. With landlords offering flexible payment options, such as multiple cheques, tenants can better manage rising rental costs.”

First Half of 2024 Performance

In the first half of 2024, average rents across Dubai saw a notable increase of 15.7% compared to the same period in 2023. Apartments and townhouses experienced nearly 15% growth, while villas saw an 18% rise. This increase is partly attributed to the updated RERA Index implemented in March, which adjusted previously undervalued units closer to the market average.

Data from Betterhomes indicated that the average rental contract price increased by 8% in both halves of 2023, continuing into the first half of 2024.

Significant Rent Hikes in Key Areas

Certain areas experienced substantial rent increases. According to Allsopp & Allsopp, Jumeirah Beach Residence (JBR), Town Square, Dubai Production City, Dubai Healthcare City 2, and Meydan all saw rental jumps between 21% and 22% in the first half of 2024. Dubai South recorded a 38% increase, driven by the new Al Maktoum Airport announcement.

Luxury communities saw even steeper hikes. Jumeirah Islands’ average rents surged by 43%, reaching Dh500,000 in H1 2024 from Dh350,000 last year. Al Barari’s average rent rose from Dh300,000 to approximately Dh400,000, marking a 39% increase.

Jacob Bramley highlighted other strong performers: Tilal Al Ghaf (21% increase), Dubai Hills Estate (14%), The Villa Project (12%), and Dubai Creek Harbour (11%).

Driving Factors

Dubai’s rental market has been on the rise post-pandemic, driven by population growth, an influx of high-net-worth individuals, and economic expansion creating new jobs. These factors contribute to the steady demand and rising rental prices across the emirate.

References:


Abbas, W. (2024a, June 24). Dubai rents set to jump 10% in remainder of 2024 – News | Khaleej Times. Khaleej Timeshttps://www.khaleejtimes.com/uae/dubai-rents-set-to-jump-10-in-remainder-of-2024

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