Rising rents in Dubai: Speculators, holiday home owners opting for long-term rentals of their properties

Speculators and holiday homeowners who used their Dubai properties just a couple of times in a year are increasingly opting to rent for full-year it out to benefit from the spike in rental returns.

“With the increase in rentals, long-term speculators or holiday home owners who come twice a year to Dubai to their holiday home are forced to rethink because the same property which had a rentability of Dh150,000 earlier, today it is Dh450,000. So they are encouraged to rent their units also. The occupancy of 45 days – 15 days during Christmas and 30 days in summer – has improved to 365 days because a resident is living now,” said Imran Farooq, CEO of Samana Developers.

Rentals in Dubai have grown at a double-digit rate in the past three years and this trend is expected to continue in some of parts of the emirate. However, most of the areas could see a softening of the rental growth in 2024 and 2025.

He added that demand for Dubai as a city for tourism and to live is substantially growing, hence, driving property prices and rentals higher. “Because of higher rentals, the motivation to keep your part-time apartment for purpose has changed to full-time renting apartment. Even long-term speculators who wanted to keep the apartment vacant, now they have a big pressure to make the most of this property by renting it out,” he added.