Dubai’s rental market continues to experience a surge in demand for one- and two-bedroom apartments, driven by rising rental costs and an influx of new residents seeking affordable housing. According to a third-quarter report by real estate firm Engel & Völkers, these units accounted for more than two-thirds of rental transactions in 2024’s third quarter.
Rising Rents Push Demand for Smaller Units
The city’s rental market remains robust, fueled by a growing population and economic activity. “One and two-bedroom apartments are in especially high demand, representing over two-thirds of transactions,” the report noted.
Among the most sought-after communities are Jumeirah Village Circle (JVC), known for its affordability and connectivity, as well as Dubai Silicon Oasis, Dubai Marina, Business Bay, and Emirates Living. Despite many tenants renewing their leases or purchasing properties to offset rising rents, rental prices continue to climb.
As of the third quarter, the average annual rent for a studio stood at AED 38,428, while one-, two-, and three-bedroom apartments averaged AED 58,812, AED 84,589, and AED 145,149, respectively. Larger units commanded significantly higher prices, with four-, five-, and six-bedroom apartments averaging AED 242,063, AED 356,928, and AED 793,971 per year.
Population Growth Fuels Market Expansion
Dubai’s population has grown substantially, increasing by over 400,000 people since 2021 to reach 3.82 million, according to the Dubai Statistics Centre. This growth has attracted professionals, investors, and high-net-worth individuals from around the world, further intensifying demand for rental properties.
Real estate consultancy Betterhomes highlights Dubai’s diverse expatriate population, cutting-edge infrastructure, and ambitious development projects as key drivers of the city’s property boom. “For those seeking a destination that delivers on promise and potential, Dubai stands out as the ultimate choice for property investment,” the firm stated.
Competitive Advantage in Global Markets
Dubai’s property market offers superior value compared to other global cities, with rental yields of up to 7%, significantly outpacing major Asian hubs like Hong Kong (2.4%), Singapore, and Tokyo. Engel & Völkers emphasized Dubai’s unique appeal as a forward-thinking and accessible market, making it a standout destination for investors.
“Amid evolving global market conditions, Dubai combines affordability with high returns, outperforming many international cities in value and investment potential,” Betterhomes added.
As Dubai continues to attract a growing number of residents and investors, its rental market is poised for sustained growth, solidifying the city’s reputation as a dynamic global real estate hub.
