Dubai’s rental market has witnessed a significant surge in demand for one- and two-bedroom apartments, driven by rising rents and an influx of new residents seeking affordable housing options.
According to a quarterly report by real estate services firm Engel & Völkers, over two-thirds of rental transactions in Dubai during Q3 2024 involved one- and two-bedroom apartments. These units remain a preferred choice for tenants downsizing due to increasing rents and new residents entering the market.
“Dubai’s rental market has stayed active for the past four years, bolstered by the city’s growing population. Communities like Jumeirah Village Circle (JVC) continue to dominate transactions, thanks to their value and connectivity. Popular areas like Dubai Silicon Oasis, Dubai Marina, Business Bay, and Emirates Living also attract renters,” Engel & Völkers noted in its report.
Despite a trend of tenants renewing contracts or buying properties, rental prices continue to rise due to sustained demand.
As of Q3 2024, average annual rents across Dubai were as follows:
Studio apartments: Dh38,428
One-bedroom apartments: Dh58,812
Two-bedroom apartments: Dh84,589
Three-bedroom apartments: Dh145,149
Four-bedroom apartments: Dh242,063
Five-bedroom apartments: Dh356,928
Six-bedroom apartments: Dh793,971
These figures highlight the growing cost of housing, pushing many tenants towards smaller units.
Dubai’s rising population has been a major driver of increased demand for rental properties. Data from the Dubai Statistics Centre reveals that the emirate’s population has grown by over 400,000 since 2021, reaching 3.82 million in 2024. This influx of professionals, investors, and high-net-worth individuals has intensified the pressure on the rental market.
Real estate consultancy Betterhomes emphasizes Dubai’s dynamic appeal as a global property investment destination. The city’s diverse expatriate population, world-class infrastructure, and ambitious development projects contribute to its continued growth.
“For those seeking a destination that delivers on both promise and potential, Dubai stands out as a prime choice for property investment,” Betterhomes stated.
Dubai’s property market offers remarkable value and investment potential compared to other global cities. While markets like Hong Kong, Singapore, and Tokyo grapple with unique dynamics, Dubai outshines with its accessibility, competitive property prices, and rental yields of up to 7.0%.
For instance:
Hong Kong: Rental yields of 2.4%, primarily catering to ultra-high-net-worth buyers.
Dubai: A balanced market offering rental yields of up to 7.0%, appealing to a broader range of investors.
“Dubai’s combination of affordability, high returns, and strategic advantages positions it as a standout destination for property investors worldwide,” Betterhomes added.
Dubai’s rental and property markets continue to thrive, driven by population growth and rising demand for smaller units. With its robust investment potential and superior rental yields, the emirate cements its position as a global hub for real estate.
