Dubai’s rental market absorbed one of its strongest demand cycles on record in 2025 without triggering significant rent increases, according to the Betterhomes Full-Year Dubai Residential Market Report 2025.
Leasing transactions at Betterhomes rose 60 per cent year-on-year, while tenant enquiries increased 36 per cent. Despite the surge in activity, average rents across the city held at Dhs207,000 per year.
The report said this reflects a market that is redistributing demand across a wider pool of communities and property types rather than reacting to short-term pressure.
Families driving the market
Families were a key driver of rental demand. Townhouse enquiries surged 200 per cent, with leasing transactions up 66 per cent. Villa enquiries rose 21 per cent, while apartment demand increased 28 per cent. This shows tenants are prioritising space, lifestyle, and long-term liveability over central locations.
Citywide rental contracts increased 5 per cent to a record 530,000, with 62 per cent of leases being renewals. Betterhomes said this points to a more stable tenant base, with residents choosing continuity rather than frequently moving between homes.
Rental prices remained controlled despite strong demand. Apartment rents rose 5 per cent, villas 11 per cent, and townhouse rents declined 3 per cent due to new supply in family-focused communities. Rupert Simmonds, Director of Leasing at Betterhomes, said: “This is what a structurally supported rental market looks like. When volumes rise this fast but rents don’t, it shows demand is being met by the right type of supply in the right locations. Families are driving this cycle, and that creates stability rather than volatility.”
Sales market also grows
Dubai’s residential sales market mirrored rental trends, with total sales reaching Dhs547 billion across 203,000 transactions. Investors accounted for 57 per cent of buyers, while end-users made up 43 per cent, showing a balanced market. Studios, one-bedroom, and two-bedroom apartments remained the fastest-moving properties, representing 77 per cent of all sales.
The report linked market stability to Dubai’s broader economic performance. The city’s population exceeded 4 million, GDP grew by up to 4.5 per cent in late 2025, and tourism attracted 17.55 million visitors, supporting both housing and rental demand.
tanvir@dubainewsweek.com
