Staff Report
Dubai, UAE
The rental market in Dubai saw an annual growth of 2.5 percent in residential lease contracts, recording 535,194 in 2024 compared to 522,627 contracts in 2023, largely buoyed by incoming expats and demand for affordable homes among mid-income earners. Moreover, 237,000 commercial contracts valued at Dh25 billion were recorded past year, demonstrating increase in commercial licenses and economic expansion, according to a report by Harbor Real Estate, a real estate consultancy in Dubai.
Significant findings from the rental market’s annual performance report include price trends, contract volume and value, and the top-performing areas across residential and commercial sectors.
In the residential sector, rental rates increased across all unit types, ranging from 3.6 percent for four-bedroom units to 17 percent for studio apartments. One-bedroom units recorded a 15 percent increase, two-bedroom units rose by 11.8 percent, three-bedroom units by 8.6 percent, and five-bedroom units saw a 10 percent growth.
On the commercial side, the sector recorded over 237,000 lease contracts, with a total value of Dh25 billion. The average contract value stood at Dh103,000, with an average rental rate of Dh162 per square foot.
Mohand Alwadiya, CEO of Harbor Real Estate, said, “This [rental] sector is expected to sustain its strong momentum in the coming years, remaining a key driver of growth in the emirate’s property market. This resilience is further reinforced by the continuous influx of expatriates and professionals seeking to establish their homes and businesses in Dubai, whether through residential or commercial leasing.”
He further elaborated on key factors supporting the continued growth of the rental sector. Forming a large section of the population, middle-income earners and newcomers to Dubai are central to the sustained demand for rental housing. Dubai continues to be an excellent commercial hub, supporting business growth that consequently drives demand for office spaces and retail outlets.
The market is buzzing with strong investor interest as higher rental returns make property purchases more lucrative. Regulatory initiatives such as Smart Rent Index, the Rental Dispute Resolution Center, and building classification systems enhance transparency, making Dubai’s market more appealing for investment. Moreover, government initiatives such as Dubai’s Urban Plan 2040 and Dubai Real Estate Strategy 2033 collectively enhance sustainability and attract more residents and investors, Mohand added.
In terms of rental price, residential areas such as Jumeirah Bay Island and Palm Jumeirah recorded the highest rates for villas and townhouses, with an average of Dh343 per square foot and Dh233 per square foot, respectively.
Jumeirah Bay Island also recorded the highest apartment rental prices in Dubai, averaging Dh455 per square foot, followed by Bluewaters Island at Dh267 per square foot, and Dubai Harbour in third place with Dh195 per square foot.
Deira topped the list of areas with the highest number of registered residential lease contracts, recording 47,928 contracts, accounting for 9 percent of the total. It was followed by Bur Dubai with 44,496 contracts and Al Nahda with 23,684 contracts.
Lease contracts valued at less than Dh50,000 dominated the market, accounting for 37.5 percent of the total. Contracts priced between Dh50,000 and Dh80,000 ranked second with a 31.8 percent share, followed by those in the Dh80,000 to Dh120,000 range, which represented 14.9 percent of the market.
In fourth place, contracts priced between Dh120,000 and Dh160,000 accounted for 6.9 percent, while contracts exceeding Dh200,000 made up 5.2 percent of the total. Lastly, contracts ranging between Dh160,000 and Dh200,000 also represented 5.2 percent of the market.
Studio apartments recorded 83,587 contracts, with a total value of Dh3.162 billion. One-bedroom units led in contract volume with 185,557 contracts, amounting to Dh10.67 billion. Two-bedroom units followed, reaching 153,650 contracts with a total value of Dh12.67 billion.
Three-bedroom units recorded 54,377 contracts, valued at Dh7.537 billion, while four-bedroom units reached 15,448 contracts, totalling Dh3.67 billion. Meanwhile, five-bedroom units accounted for 4,793 contracts, with a total value of Dh1.7 billion. Lastly, six-bedroom units recorded 958 contracts, reaching a total value of Dh569 million.
Deira emerged as the leading area for commercial lease contracts, with an impressive 85,723 contracts, accounting for 36.1 percent of the total market share. It was followed by Bur Dubai in second place with 18,297 contracts, while Dubai Investment Park ranked third with 18,205 contracts, reflecting strong demand in these strategic locations.
Business Bay followed in fourth place, with 15,094 contracts, highlighting its growing popularity as a key business hub. Al Quoz rounded out the top five with 14,625 contracts.
In terms of contract value, leases under Dh50,000 dominated the market, accounting for a substantial 57.2 percent of the total number of commercial lease contracts, with 135,564 contracts. Following this, contracts in the Dh50,000 to Dh80,000 range ranked second, representing 13.7 percent of the market with 32,469 contracts.
Contracts priced between Dh80,000 and Dh120,000 came in third with 10.4 percent of the market share (24,648 contracts), while leases exceeding Dh200,000 secured fourth place with 9.4 percent (22,278 contracts). Contracts ranging between Dh120,000 to Dh160,000 accounted for 5.8 percent of the market (13,746 contracts), while leases in the Dh160,000 to Dh200,000 range rounded out the top six with 3.5 percent (8,295 contracts).
The commercial leasing sector in Dubai exhibited strong growth throughout 2024, underpinned by sustained demand for office and retail spaces. Rental rates for office and retail properties increased by four percent, while warehouse rents experienced a more significant surge of 19 percent, reflecting heightened demand within the industrial segment.
Retail stores (shops) led the list in terms of contract value, with a total of Dh9.2 billion derived from 59,739 contracts. The average contract value was Dh154,000 (Dh259 per square foot). Following closely, office spaces ranked second, generating Dh8.9 billion through 146,129 contracts, with an average rental value of Dh61,000 (Dh101 per square foot).
In third place, warehouses recorded a value of Dh1.57 billion from 8,551 contracts, with an average rental price of Dh184,000 (Dh46 per square foot).
In summary, Dubai’s commercial leasing market has continued its positive trajectory, driven by the expanding demand for both office and commercial spaces. This trend further reinforces the city’s standing as a premier business and investment hub on the global stage.
Ends
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