Dubai Real Estate Rental Market Forecast: 10% Growth Expected in H2 2024
The Dubai rental market continues to show robust growth in 2024, with rents projected to increase by another 10% in the second half of the year. This follows a similar rise in the first half of 2024, driven by a surge in population, the influx of high-net-worth individuals, and significant economic expansion.
H1 2024 Rental Market Performance
In the first half of 2024, average rents in Dubai increased by 15.7% compared to the same period in 2023. This growth was observed across various property types:
Apartments and Townhouses: Nearly 15% increase
Villas: Approximately 18% increase
The updated RERA Index implemented in March 2024 has also played a crucial role in aligning previously undervalued units closer to market averages, contributing to the overall rental increase.
Top Performing Areas
Several communities witnessed substantial rent hikes, with some areas experiencing increases of up to Dh150,000. Key areas with notable rental growth include:
Jumeirah Beach Residence (JBR)
Town Square
Dubai Production City
Dubai Healthcare City 2
Meydan
These areas saw a rental increase of 21-22% in H1 2024. Dubai South also experienced a remarkable 38% rise in average rents, spurred by the announcement of the new Al Maktoum Airport.
Luxury Communities and High-End Market Trends
Luxury communities have seen even more significant rental growth:
Jumeirah Islands: 43% increase, with average rents reaching Dh500,000 in H1 2024, up from Dh350,000 last year.
Al Barari: 39% increase, with average rents rising from Dh300,000 to approximately Dh400,000.
Other strong performers include:
Tilal Al Ghaf: 21% growth
Dubai Hills Estate: 14% growth
The Villa Project: 12% growth
Dubai Creek Harbour: 11% growth
Rental Market Outlook for H2 2024 and Beyond
Industry experts predict continued growth of 5-10% in the second half of 2024, with over 10,000 new units expected to be handed over in Q2 alone. This increase in supply is crucial to meet the rising demand driven by population growth and the influx of new residents, including over 6,700 millionaires moving to the city in the first five months of 2024.
Landlords are also adapting to market trends by offering flexible payment options, such as multiple cheques, to help tenants manage the rising costs.
Dubai’s rental market is poised for continued growth in the latter half of 2024, supported by a strong influx of new residents, economic expansion, and a steady increase in supply. This dynamic market presents numerous opportunities for both tenants and investors looking to capitalize on Dubai’s thriving real estate sector.
