Dubai’s rental market is showing signs of cooling this summer, especially for studios and one-bedroom apartments. As new housing supply enters the market and regulatory crackdowns continue, tenants are gaining more flexibility and negotiating power—offering a temporary break in the city’s fast-paced rental climb.
Rental rates in several Dubai neighbourhoods—especially for studio and one-bedroom apartments—are stabilizing or even declining during the summer months. This marks a turnaround from earlier in 2025, as tenant demand adjusts to increased housing supply and enforcement of rules against subletting and unauthorised partitioning.
Table of contents [Show]
Recent listings show modest rent drops in communities such as International City and Discovery Gardens. Studios in International City are listed around AED 28,000–29,000 annually, with one-bedroom units at AED 48,000–55,000. Meanwhile, Discovery Gardens studios are priced AED 48,000–60,000 and one-bedrooms AED 50,000–105,000—down around 1% over the past two months.
Sources confirm that the crackdown on partitioned homes and informal sublets has not led to rising rents. Instead, affordability in mid-tier areas looks set to improve. Apartments often remain priced according to the building's independent star rating as per the Smart Rental Index.
Earlier in 2025, Dubai rents surged thanks to limited supply combined with strong demand. Analysts had projected annual increases of 13% for long-term leases and up to 18% for short-term rentals—particularly in central districts.
However, by mid‑year, over 9,000 newly completed homes entered the market. With more than 72,000 new units expected by year-end, rental growth began cooling off sharply. Mid-range and affordable segments are stabilizing, while luxury areas are seeing mild corrections.
Most of the rental easing is concentrated in mid-market districts. Popular areas such as Jumeirah Village Circle (JVC), Deira, Discovery Gardens, Sports City, and International City now offer more stable or slightly reduced rates for compact apartments.
Community star ratings—designed to encourage building upkeep and tenant protections—are also influencing rent ceilings. Units in lower-rated buildings are not seeing significant increases, as tenants demand better-quality options.
Dubai’s enforcement campaign targeting illegal residential partitions and unauthorized sublets aims to improve safety and standardise rental practices. Despite eviction orders in certain affected areas, the sheer volume of new supply means rents have not spiked as feared.
Leasing agents note that many tenants forced to relocate are spreading demand across emirates—as far as Sharjah—relieving pressure on central rental zones.
Recent observations suggest that new lease signings in the studio and one-bedroom category have remained flat over the past three months. Landlords appear unwilling to raise rents amid high vacancy rates and tenant mobility.
Some neighbourhoods have even seen modest year-on-year declines: for example, rent for one-bedroom units in Jumeirah Village Triangle (JVT) has dropped by around 2.6%.
Real estate analysts see these trends sustained by rising housing supply and regulatory measures such as the Smart Rental Index, which caps permissible rent increases during lease renewal.
More negotiating power: Tenants, particularly on new leases, can negotiate better terms amid soft demand.
Shift to value living: Renters are considering newer buildings in communities like JVC, Al Furjan, and Dubai South where rents remain affordable.
Flexible offerings: Landlords in older developments may offer incentives like rent waivers, longer lease terms, or upfront move-in benefits.
The rapid rise in supply and modest rent corrections are likely to continue. Luxury buildings and villa rentals may remain resilient with minor increases, but mid-tier and affordable segments should see more price moderation.
Looking ahead, analysts forecast August to December 2025 to maintain this pattern of stable or slightly declining rents across many segments—bathrooms largely dependent on new inventory absorption and tenant appetite.
Real estate professionals describe the current climate as a shift from pressure to pause. One agent noted: “Renewal rates remain elevated versus last year, but new contracts show no significant growth. Tenants now have greater selection and can wait for better deals.”
Further, feedback suggests a growing number of landlords view the influx of supply as an opportunity to reposition their offers, especially by upgrading older units to attract tenants in a competitive landscape.
Summary:
Studio and one-bedroom rents in mid-market Dubai communities are moderating this summer. Increased supply, regulatory curbs on unethical housing practices, and tenant-friendly regulations now favour renters. As new units continue to launch, 2025 may mark a softening phase in Dubai’s rental cycle—boosting affordability across more neighbourhoods.
