Dubai’s property market is experiencing a significant shortage of luxury apartments, leading to a sharp rise in rental prices for high-end properties, according to industry experts.
Dubai currently has only a handful of ready luxury apartment projects available, said Vladimir Minaev, a luxury property specialist at Metropolitan Premium Properties. “We have just four or five truly luxurious options in the market,” he explained. High-net-worth individuals (HNWIs) moving to Dubai often choose to rent luxury apartments initially while exploring suitable neighborhoods. With limited availability, rental prices have soared.
A prime example of this trend is a recent record-breaking rental deal. A European HNW family rented a 10,000 sqft penthouse at The Royal Atlantis Resort and Residences on Palm Jumeirah for Dh4.4 million. This is believed to be the highest single-unit rental agreement in Dubai’s history. The fully furnished penthouse includes four bedrooms, a library, an exercise room, and hotel-style amenities, appealing to tenants seeking a turnkey luxury lifestyle.
Rohit Bachani, co-founder of Merlin Real Estate, noted that the definition of luxury is evolving. “Luxury is no longer just about opulence—it’s about lifestyle, amenities, and a unique sense of identity,” he said. Dubai’s influx of HNWIs has added diversity to the market, pushing the demand for exclusive properties with top-tier amenities and architectural uniqueness.
Jeff Raju Kuruvilla, CEO of Manifest Real Estate, highlighted the growing gap between demand and supply. “The luxury apartment segment is struggling to meet the needs of buyers and renters,” he said. Developers have launched unique projects in 2024, but these have been unable to keep pace with the demand. Luxury off-plan properties are often sold within hours of their launch and command premium prices in the secondary market.
Luxury penthouses are particularly hard to find, explained Minaev. “Unlike villas, penthouses are rarely available for rent because owners typically buy them as investments and later sell them,” she said.
The luxury segment in Dubai continues to attract investors due to its strong rental yields, which range between 5% and 7%, according to Kuruvilla. Established areas like Palm Jumeirah, Downtown Dubai, and Business Bay remain top choices for investors.
A growing trend in Dubai’s luxury market is the popularity of branded residences, which combine high-end living with globally recognized brands. These properties have become some of the most sought-after investments in the city, further fueling demand in the luxury segment.
Dubai’s real estate market continues to solidify its position as a global hub for luxury living, with limited supply driving both rental and purchase prices to new heights.
