A new report by Betterhomes shows a significant shift in Dubai’s rental market, with more tenants now planning to purchase property amid rising rents and growing mortgage accessibility.
The Future Living Report 2025, based on a survey of 1,439 Dubai residents, indicates a structural change in end-user behaviour, driven by long-term residency plans and investment confidence.
Tenant purchase intent
According to the report, 55 percent of tenants now plan to buy property within the next one to three years, up sharply from 25 percent in 2024. The survey also shows that 61 percent of prospective buyers intend to finance their purchase with a mortgage, highlighting the role of structured lending in converting tenant interest into property acquisition.
Ownership patterns are increasingly diverse, with a near-even split between outright purchases and mortgage-backed acquisitions. The average homeowner’s property value stands at Dhs 4.5 million.
With the current average annual rent at Dhs 99,000, affordability remains a key concern. About 69 percent of tenants said they would consider relocating if rents rise significantly, suggesting that high rental costs are nudging residents toward long-term homeownership.
“Purchase intent among tenants has jumped from 25% to 55% in just one year, with 61% planning to use mortgages,” said Louis Harding, CEO of Betterhomes.
“This is more than sentiment; it’s reshaping end-user demand, prompting developers and lenders to evolve with more accessible ownership models, diverse property types, and financing solutions that match evolving household needs.”
Long-term residency and investment drive
The behavioural shift is supported by strong residency intentions, with 59 percent of respondents planning to stay in Dubai for a decade or more, averaging 11.2 years. Additionally, 36 percent of respondents view real estate as a key investment for the future, reflecting growing confidence in property as both a home and an asset. Lifestyle changes, including remote work and the demand for larger, flexible living spaces, are also encouraging upgrades from apartments to townhouses and villas.
Structural market shift
Experts suggest the change is structural rather than cyclical. The rising interest in property ownership is expected to increase demand for mid-market and family homes in established communities such as Dubai Hills and Dubai South. Mortgage activity is also likely to grow, prompting lenders to speed up approvals and offer more flexible financing solutions.
The report indicates that rental markets could face pressure as tenants weigh lease renewals against the cost of owning a home, potentially accelerating property absorption. There is also growing awareness of innovative property investment models, including blockchain-backed fractional ownership. While 37 percent of respondents are aware of such solutions, only 6 percent have invested so far.
Betterhomes’ findings underline a notable trend: Dubai tenants are increasingly moving from renting to ownership, influenced by affordability, financing options, and long-term commitment to the city.
tanvir@dubainewsweek.com
