Recent observations suggest that the pace of residential rent increases in Dubai may be slowing down, particularly in specific areas. Betterhomes, a brokerage firm, reports an increase in rental inventory, indicating that more properties are becoming available for tenants.

Rupert Simmonds, the Director of Leasing at Betterhomes, noted that this trend is reinforcing the idea of rent stabilization in certain neighborhoods for 2025. He explained that tenants now have more options and are becoming increasingly price-sensitive. As a result, landlords who offer competitive pricing are able to secure tenants more quickly. Simmonds emphasized that, given the substantial rent surges in recent years, minor fluctuations in rental prices can be seen as part of a healthy market cycle.

In recent weeks, mid-market areas such as Discovery Gardens, Sports City, and Deira have shown signs of stability in rental growth. Tenants who have experienced rental hikes of 20% to 40% over the past three years view any decrease in landlords’ asking prices as a promising sign of improvement. Property market experts suggest that the current situation reflects a modest cooling in rental growth rather than a significant market correction.

The newly launched Dubai Rental Index, which has been operational for just over two months, is playing a role in influencing rental trends. This digital Index tracks market trends in real-time and features a star rating system, which requires landlords to adjust rents based on their building’s score on a scale of one to five stars. Property market sources indicate that it may take an additional three to six months for the rental market to fully adjust to the changes introduced by this Index.

As more properties become available for rent, it suggests that landlords may have less opportunity to demand higher rents for both new leases and renewals. An estate agent highlighted that a key trend to watch is the duration that listed properties remain on the market. If properties with above-average asking prices take longer to rent, it could indicate a shift toward greater rental stability in the market.

According to the Betterhomes report, February recorded 36,223 leasing transactions in Dubai, marking a 10% decrease from January. Notably, renewals accounted for 59% of these transactions, indicating a trend towards stability in the rental market.