The Impact of High Demand on Tenant Offers
Rising rents have become the norm across most areas in Dubai in recent years, driven by a surge in population and limited housing supply.
Incentives such as rent-free months and early move-in grace periods, once common in the Dubai rental market, are now rare. Landlords are capitalizing on high occupancy rates fueled by the emirate’s growing population.
While landlords are willing to accept rent payments spread over multiple cheques, this often translates to a higher overall rental price for tenants.
Population Growth and Housing Shortages
Dubai’s population reached 3.65 million in 2023, attracting foreign workers, professionals, and investors post-pandemic. This influx has created a shortage of available homes, tipping the market heavily in favor of landlords.
Alois Kugendran, from Huspy, notes the scarcity of incentives like rent-free months due to increased demand and limited housing availability.
New Buildings vs. Established Properties
In established areas, landlords rarely offer incentives for renewals, focusing on mutually agreeable terms instead. However, new buildings may still provide incentives to attract tenants amidst initial oversupply and competition.
Landlords’ Strategy Shift
With high occupancy and rising rents, landlords are prioritizing long-term tenants and property quality over traditional incentives. Karun Luthra, from Foremen Fiefdom, emphasizes the value of property features and amenities in attracting tenants.
Decrease in Incentives, Increase in Rent Prices
While landlords are open to rent payments in multiple cheques, they prioritize securing higher prices, ultimately boosting their returns on investment.
The Dubai rental market’s evolution reflects a shift away from incentives as landlords leverage high occupancy rates to maintain rental prices and enhance returns.