Dubai tenants are renewing their residential leases as rents continue to rise, with a 14% annual increase in the number of renewals in the second quarter of this year.
With over 50,000 new residents moving to Dubai in the first half of 2024 demand for new properties across the market continues to outweigh the current supply.
Rents rose for the 14th consecutive quarter according to property consultancy Cushman and Wakefield Core.
Apartment rents have increased by 22% compared to the same period last year and villa rents rose by 13% during the same time period.
In May, average apartment and villa rents stood at AED 126,598 and AED 352,572 per annum, respectively.
“We are seeing tenants choosing to renew in same place, as the rate of rental growth in certain neighbourhoods has significantly weighed on affordability,”
CBRE report May
The highest annual apartment and villa rents were found, respectively, in Palm Jumeirah, where asking rents reached an average of AED 272,867.
The number of rental registrations in the first five months reached 255,178, an increase of 5.9% year-on-year, according to data from the Dubai Land Department.
“Household incomes are not keeping pace with rising rents, which is further contracting disposable incomes.
“Similar to the trends seen in the sales market, rents in the mid-market apartment districts, such as Discovery Gardens, Dubai Sports City and Dubailand, saw the steepest rise, whereas prime districts saw lower levels of increase.”
Prathyusha Gurrapu, head of research and consulting, Cushman and Wakefield Core
Also, rents continued to rise in Abu Dhabi. Apartment rents increased by 2% annually in during the second quarter, while villa rents rose 5%, according to the latest report from Asteco.
This news follows a report from June that Dubai rents were to rise by 10% by the end of 2024.
The areas that have been hit with the largest increases in the first half of 2024 were Jumeirah Beach Residence (JBR), Town Square, Dubai Production City, Dubai Healthcare City 2 and Meydan. These areas were being met with a 21% to 22% jump in rentals.
