Why Rents Aren’t Going Down Anytime Soon in Dubai—What Tenants and Investors Should Know
By Firas Al Msaddi on Friday, 08 November, 2024
Despite Dubai’s impressive construction pipeline, tenants hoping for relief in rental prices may need to adjust their expectations. The reality? Dubai’s rental prices are unlikely to decrease anytime soon, despite the 283,928 units currently under development. Why? According to Firas Al Msaddi, CEO of fäm Properties, the majority of these projects won’t be completed until at least 2028. “Looking at the upcoming supply, it’s clear that much of it is far from delivery,” Al Msaddi explains. “Of these nearly 284,000 units, around 71%—about 187,116 homes—are only 0% to 20% complete, while 12% are between 21% and 40% completion. In short, over 200,000 of these units are in the very early stages and won’t be ready for several years.” This timeline means that for the next few years, the market won’t see enough additional supply to drive down prices or ease rental pressure significantly.
Key Supply Stats and What They Mean for the Market
The breakdown of Dubai’s upcoming residential units tells a clear story about the timeline of supply growth:
• 71% of units (approximately 187,116) are between 0% and 20% complete.
• 12% of units are at 21% to 40% progress.
• Many of these units are not expected for handover until 2028 or beyond.
This extended timeline means that, while Dubai is actively expanding its residential supply, the impact won’t be felt immediately. “With most of the upcoming supply not arriving until several years down the line, I don’t foresee a significant drop in rental prices in the near term,” says Al Msaddi. “And as long as rent remains high, property values are also likely to stay stable or increase.”
A Balanced Market for Investors
For investors concerned about oversupply, these numbers should offer reassurance. While Dubai has ambitious construction plans, the gradual handover of these units will prevent a sudden oversupply. “We’re entering a more stable, sustainable phase in the Dubai property market,” Al Msaddi observes. “The city’s strategic approach to pacing new handovers is setting up for a balanced market. This benefits tenants by ensuring quality housing and supports investors by stabilizing property values over time.”
What This Means for Tenants and Buyers
Tenants looking to secure long-term housing might consider purchasing in today’s market rather than waiting for rents to decrease, given the high demand and delayed supply timeline. For buyers, the outlook is also positive: Dubai’s steady demand suggests long-term value in property investments, with limited supply growth over the next few years to stabilize prices. As Dubai’s real estate market matures, the city remains one of the most attractive destinations for both residents and investors. With strategic supply pacing and resilient demand, Dubai’s rental prices and property values are set to stay strong, reinforcing the city’s position as a thriving, stable real estate hub.
Key Supply Stats and What They Mean for the Market
The breakdown of Dubai’s upcoming residential units tells a clear story about the timeline of supply growth:
• 71% of units (approximately 187,116) are between 0% and 20% complete.
• 12% of units are at 21% to 40% progress.
• Many of these units are not expected for handover until 2028 or beyond.
This extended timeline means that, while Dubai is actively expanding its residential supply, the impact won’t be felt immediately. “With most of the upcoming supply not arriving until several years down the line, I don’t foresee a significant drop in rental prices in the near term,” says Al Msaddi. “And as long as rent remains high, property values are also likely to stay stable or increase.”
A Balanced Market for Investors
For investors concerned about oversupply, these numbers should offer reassurance. While Dubai has ambitious construction plans, the gradual handover of these units will prevent a sudden oversupply. “We’re entering a more stable, sustainable phase in the Dubai property market,” Al Msaddi observes. “The city’s strategic approach to pacing new handovers is setting up for a balanced market. This benefits tenants by ensuring quality housing and supports investors by stabilizing property values over time.”
What This Means for Tenants and Buyers
Tenants looking to secure long-term housing might consider purchasing in today’s market rather than waiting for rents to decrease, given the high demand and delayed supply timeline. For buyers, the outlook is also positive: Dubai’s steady demand suggests long-term value in property investments, with limited supply growth over the next few years to stabilize prices. As Dubai’s real estate market matures, the city remains one of the most attractive destinations for both residents and investors. With strategic supply pacing and resilient demand, Dubai’s rental prices and property values are set to stay strong, reinforcing the city’s position as a thriving, stable real estate hub.
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