Due to ongoing rent increases that force tenants into smaller apartments and demand from newcomers seeking cheaper real estate, one- and two-bedroom apartments are in high demand for rental in Dubai.
In the third quarter of 2024, over two-thirds of transactions were for one- or two-bedroom apartments, according to a quarterly report published by real estate services company Engel & Völkers.
Over the past four years, Dubai’s rental market has remained bustling due to the city’s expanding population.
Popular Areas and Market Trends
“One and two-bedroom apartments are in high demand, representing over two-thirds of transactions. Jumeirah Village Circle (JVC) continues to lead as the top transacting community, favored by ex-pats for its value and connectivity. Established areas like Dubai Silicon Oasis, Dubai Marina, Business Bay, and Emirates Living also remain popular. Despite a growing number of tenants opting to renew their contract or buy a property, rental prices continue to face upward pressure,” Engel & Völkers said in its quarterly report.
Rental Costs Overview
The average annual rent for a studio in the third quarter of 2024 was Dh38,428; one-, two-, and three-bedroom apartments cost Dh58,812, Dh84,589, and Dh145,149, respectively; and the average rent for four-, five-, and six-bedroom apartments was approximately Dh242,063, Dh356,928, and Dh793,971, respectively.
As a result of the steady increase in population since 2021, rental prices and property values have risen above the record highs of 2014.
Population Growth and Market Impact
According to the Dubai Statistics Centre, the emirate’s population has increased by more than 400,000 to 3.82 million in the past four years, attracting professionals, investors, and high-net-worth individuals worldwide.
According to real estate firm Betterhomes, Dubai’s ambitious building pipeline, strong infrastructure, and diversified expatriate community contribute to the city’s dynamic growth story.
“For those seeking a destination that delivers on promise and potential, Dubai stands out as the ultimate choice for property investment,” it added.
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Global Market Comparison
Dubai’s property market offers exceptional value and unparalleled investment potential compared to other cities worldwide.
“While other Asian markets face unique dynamics, Dubai’s advantages set it apart as a vibrant, forward-thinking hub for property investors,” adding that cities across Asia like Hong Kong, Singapore, and Tokyo navigate market-specific characteristics that influence their appeal. Although its market is increasingly geared toward ultra-high net worth purchasers, Hong Kong offers rental returns of 2.4% because of its high demand and competitive terrain.
“Amidst these evolving market conditions, Dubai has emerged as a standout destination, combining accessibility with high returns. Offering competitive property prices and rental yields of up to 7.0%, the emirate significantly outperforms many global cities in value and investment potential,” said Betterhomes.
