Dubai Residential Rents Reach 10-Year High as Demand Outpaces Supply
Dubai’s rental market continues its upward trajectory, hitting a 10-year high as demand outpaces supply in many residential zones. As of July 2025, average apartment rents have soared to AED 103,000 per year, marking a 21.7% year-on-year increase. Meanwhile, villa rents surged by 19.6%, reaching an average of AED 328,000, as families seek more space in established communities.
This surge reflects strong population growth, sustained demand from remote workers and new expatriates, and a growing economy supported by robust infrastructure and ongoing visa reforms. Despite a strong handover pipeline, supply bottlenecks remain in high-demand areas, creating an environment where residential rents reach 10-year peaks and tenants face steep renewal increases.
Top Performing Areas – Apartments and Villas
Based on the latest figures from DXB Interact, the top performing areas for apartment rental growth include:
- Jumeirah Village Circle (JVC): +27%
- Dubai Marina: +24%
- Business Bay: +22%
- Downtown Dubai: +20%
For villas, demand is even stronger in:
- Arabian Ranches 2: +30%
- Dubai Hills Estate: +26%
- The Springs/The Meadows: +23%
- Mirdif: +18%
Demand Outpaces Supply in Key Areas
Despite the handover of over 39,000 new residential units in the first half of 2025—primarily in MBR City, JVC, and Arjan—demand outpaces supply in many core districts. Dubai’s population crossed 3.75 million in June and is forecast to reach 4 million by the end of 2026. This rapid urban inflow has pushed Dubai residential rents reach record levels, especially in family-friendly, metro-connected, and school-adjacent zones.
Tenants Facing 15–30% Rental Increases
RERA’s rental index continues to lag behind actual market conditions, giving landlords space to raise rents significantly during lease renewals. In many districts, including JVC, Dubai Marina, and Downtown Dubai, tenants are experiencing increases ranging from 15% to 30%.
Some renters are responding by:
- Relocating to outer districts like Remraam, Dubai South, and International City
- Engaging with the Rental Dispute Settlement Centre to challenge excessive increases
Investor Outlook: High Yields in a Competitive Market
The current market presents attractive opportunities for investors. Here are the average yields:
- Apartments: Net yields at 6.3%—higher in areas like JVC, Sports City, and IMPZ
- Villas: Net yields at 4.7%—particularly strong in communities like The Villa, Mirdif, and Serena
However, entry point matters more than ever as property prices climb. Investors are increasingly turning to off-plan developments by trusted developers such as:
What Lies Ahead?
As Dubai gears up for further population growth and urban expansion, rental demand will continue to apply upward pressure—especially in areas where supply in key areas struggles to keep pace. With residential rents reach 10-year highs and top performing areas maintaining strong momentum, investors and tenants alike must plan strategically.
To stay informed on the latest trends and access exclusive property opportunities, visit Aurantius Real Estate.
