Sharp rise in rents in Dubai
Rents are rising steadily in Dubai, with increases of over 30% in some neighborhoods. This is becoming a real concern for residents, who sometimes find themselves forced to move. In this article, Dubai Immo takes a look at thefigures for rent trends in Dubai, and the causes and consequences of these increases.
Dubai rents: head-turning figures
The figures released by the Dubai Land Department and relayed on DXB Interact are impressive. Average rental apartment prices rose by +20.7% between November 2022 and November 2023. The increase is even more pronounced for villas. Indeed, the average price of a villa rental in Dubai rose by +30. 9% over the period. For commercial premises, the increase is +25%.
Dubai joins Paris in rental prices
It may sound crazy, but rental prices in Dubai are now on a par with Paris. And this despite the fact that the purchase price is around 2.5 times more expensive in Paris... To go into more detail, the average rent for an apartment is €1,599. In Dubai, the average rent is now 1460€. An impressive development, considering that rents in Dubai were still very affordable just a few years ago.
Why are rents rising so fast in Dubai?
With the growth in the population (around 200,000 people in two years), rental demand is exploding in Dubai. Housing construction is unable to keep up with the growing demand, due to the arrival of new residents. Another factor is the fact that many properties are now being rented out on a seasonal rather than an annual basis. Investors are attracted by the very high returns generated by short-term rentals. The influx of tourists is such that more and more of them are turning to Airbnb rentals for their stay in Dubai.
What are the consequences of rising rents in Dubai?
Many residents are unable to cope financially with rising rents. In Dubai, rents can be revised every year, based on the rent index provided by the Dubai Land Department. With increases sometimes exceeding 10%, some residents find themselves forced to move. Incomes have not necessarily risen in the same proportions as rents. A feeling of downgrading can set in, after moving to a less prestigious area or from a villa to an apartment. Some people even choose to move with their families to neighboring Emirates, such as Sharjah or Ras Al Khaima, where rents are cheaper than in Dubai.
Conclusion
The property rental market is very tight, driven by the growing population and number of tourists, more and more of whom are opting to rent an apartment rather than a hotel room. Housing construction is in full swing, but apartment deliveries are still not sufficient to meet demand, which remains higher than supply, resulting in rising prices.
