Rent Stabilization Expected in Dubai with Increased Housing Supply

Dubai's rental market is entering a more stable phase after two years of significant increases. Experts predict a slowdown in rental growth through early 2026, driven by a surge in new home handovers across key communities. This shift is expected to bring a more balanced market, with growth occurring at a more moderate pace compared to the previous two years, especially in areas with limited new supply like established villa communities and central apartment zones.

The trend will vary across property types. While mid- to upper-mid segments may see a stabilization in rents, the luxury market is expected to maintain strong demand due to the influx of high-income professionals and long-term visa holders. There's also a growing preference for villas and townhouses as Dubai evolves into a family-focused destination, prioritizing space, privacy, and community-oriented environments.

Developers are responding to these shifts, with a large wave of handovers anticipated in 2025 and 2026, particularly in the apartment market. This increased supply will create competition, potentially leading landlords of older properties to moderate rent increases to retain tenants. The influx of new homes is expected to offer tenants more choices and sustain Dubai's appeal as a global residential destination.

Recent data supports this trend, with strong property sales in Q3 2025. Analysts anticipate over 42,000 new homes to be delivered in 2025, the highest since 2017, easing pressure on the mid-market. Forecasts suggest rent and price increases will be less than 10% this year, a significant decrease from the double-digit jumps of the past two years. Overall, Dubai's maturing housing market is poised to offer tenants more options and a more stable environment as supply catches up with demand.