Dubai rents are falling for new tenants but rising for those renewing: What 2026 data shows

Dubai: An analysis based on data from the real estate platform DXBinteract, revealed a divergence in the Dubai rental market during the third quarter of 2026, with the average annual rents for new contracts declining by 2.3% for apartments and 11.1% for villas on an annual basis, despite an increase in the number of new contracts by 18.2% for apartments and 41.7% for villas. In contrast, rents for renewed contracts continued to rise, recording an increase of 3.4% for apartments and 10.3% for villas, amid clear differences between areas and residential categories, reflecting a shift in market dynamics and the increasing importance of competitive prices in attracting tenants. Real estate agents confirmed that the decline in new contract rents in some areas of Dubai represents a positive price correction after the waves of increases witnessed in the market during the past periods, in light of changes in supply and demand and increased competition among landlords to attract tenants. They explained that price movements in the Dubai rental market are linked to several factors, most notably the size of the supply, the levels of demand, the location of the property, its specifications, and the services available in it. Specifically, an analysis based on data from the real estate platform DXBinteract showed that the number of new apartment contracts in Dubai reached, in the third quarter of this year, 52,173 contracts, compared to 44,123 contracts in the same quarter of 2025, an increase of 18.2%, while its average annual rent decreased from Dh70,000 to Dh68,400. For villas, the number of new contracts increased from 2,526 to 3,579, an increase of 41.7%, while the average rent decreased from Dh225,000 to Dh200,000 per year. Mohammed Turki, the real estate manager at Al Waleed Real Estate Group, confirmed that the decline in new contract rents in some areas of Dubai represents a positive correction to prices. Picture credit: Supplied According to the data, the increase in the number of contracts coupled with a decrease in the average rent is consistent with a more competitive market. However, it does not, on its own, prove a decrease in the rent for every similar unit, as the type of property involved in the contract may change between the two periods. The data revealed that the average rent for renovated apartments rose from Dh58,000 to Dh60,000 (a 3.4% increase), with the number of renovation contracts increasing to 50,003 (a 5.4% increase). Meanwhile, the average rent for renovated villas rose from Dh176,000 to Dh194,040 (a 10.3% increase), with the number of renovations increasing by 2.8%. In addition, Mohammed Turki, the real estate manager at Al Waleed Real Estate Group, confirmed that the decline in new contract rents in some areas of Dubai represents a positive correction to prices after the increases witnessed in the market during the past periods, in light of changes in supply and demand. He said that these movements do not necessarily mean that the rental market in Dubai is entering a phase of general decline, as price trends vary from one area to another according to the size of the supply, levels of demand, quality of properties and available services, noting that some areas may record declines, while others maintain their price levels or achieve limited increases. Turki predicted that the market would witness more stability and balance during the coming period, supported by the diversity of housing options and the continued influx of residents to the emirate, which enhances the market's long-term attractiveness. Raad Ramadan, director of Awad Qarqash Real Estate Company, said that price movements in the Dubai rental market are linked to several factors. Picture credit: Supplied For his part, Raad Ramadan, director of Awad Qarqash Real Estate Company, said that price movements in the Dubai rental market are linked to several factors, most notably the size of the supply, the levels of demand, the location of the property, its specifications and the services available in it, pointing out that the difference in the characteristics of areas and real estate projects is directly reflected in the rental value. He explained that the rental market in Dubai has three main levels for determining prices, which are the rental index issued by the Land Department, the prices displayed in real estate advertisements, in addition to the prices set by the owners, noting that there is a difference between these levels according to market conditions, the owner’s estimates and the size of the demand for the property. Ramadan added that the rental index and prices advertised in real estate advertisements and the prices set by owners may sometimes not match, as each owner sets his estimates according to the features of the property, its location, his financial obligations and his desire to rent or sell, which leads to price differences within the market. He predicted that the market would witness a positive correction in price