Dubai’s Real Estate Market Poised for Rental Price Surge in 2025

Dubai's real estate market is expected to see a surge in rental prices in 2025, with an anticipated 18% increase in short-term rentals and a projected 13% rise in long-term lease rates. This growth is influenced by factors such as rising property values and improved expatriate residency laws, making Dubai a prime destination for real estate investment and expatriate relocation. The market has shown strong performance in 2024, with a 13.5% average increase in rental prices and a 16% growth in overall property prices. Seasonal pricing patterns are also evident, with peak rates during high-demand months.

In 2025, short-term rentals are expected to increase by 18%, driven by tourists and short-term expatriates, while long-term rentals may see a 13% rise as residents continue to choose Dubai as their home base. Premium areas could see up to a 25% growth in rental rates. Key drivers of this market growth include global migration of professionals, rising property values, increased business activities, tourism sector expansion, and new residential developments. These factors contribute to Dubai's position as a global real estate hotspot with significant appreciation expected across the rental market.

Dubai's updated expatriate residency laws have led to an increase in expatriates making the city their long-term base, driving demand for rental properties. The property market in Dubai is expected to remain favorable in the coming years, with a balanced mix of properties catering to various rental needs and 182,000 new units expected by 2026. Investor interest in premium properties is high, contributing to a strong supply foundation that meets both short-term and long-term renter needs.

Transaction activity in Q3 2024 showed robust real estate activity, with over 48,000 property sales and a total transaction value of AED 120 billion. Rising property values and increased investor participation continue to support a thriving rental market in Dubai.

For tenants, projected rental price increases suggest potential budget adjustments may be needed, and flexible lease options should be considered. Investors are set to benefit from the projected rental growth, with increased passive income opportunities.

In short, Dubai's real estate market is on a growth trajectory, supported by rising rental demand and favorable economic conditions, making it a prime destination for high-value real estate investments. Global residents continue to see Dubai as a sought-after location for real estate investments, with strong prospects for continued appreciation in property values.