Tenants in areas with limited supply will face higher rent hikes, while increased supply will boost competition between tenants and landlords
Rents in Dubai will increase by up to six per cent in 2026 due to the growing population in the city, albeit at a slower pace than in previous years due to new supply, according to industry executives.
Tenants in communities where supply remains constrained will bear the brunt of the rent increases. But areas that will see increased supply will have stronger competition between tenants and landlords.
“Dubai’s residential rental market is expected to move into a more mature and balanced phase in 2026, with rental rates and yields showing steady but moderated growth after the sharp increases seen in recent years. Rental increases of approximately four to six per cent are still expected in select, high-demand areas in 2026, particularly where supply remains constrained, and tenant competition is strongest,” said Georgina Moyes, head of rentals at Metropolitan Premium Properties.
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“The strongest performance will remain concentrated in segments where supply is structurally limited, particularly villas, townhouses and larger two- and three-bedroom apartments in beachfront and well-established master communities,” she added.
The city continues to attract professionals, investors and millionaires from around the world, pushing its population above four million in 2025.
Tenant-friendly market?
Real estate industry insiders say that the Dubai property market is slowly and steadily becoming a more tenant-friendly rental market on the back of increased supply following a strong double-digit increase over the past few years.
According to Betterhomes data, Dubai’s residential supply pipeline continued to expand steadily through the first nine months of 2025, with a significant portion of supply expected in the fourth quarter of this year. Going forward, it is projected that 200,000 units are scheduled for delivery by 2027, and 22,000 villas and 42,000 townhouses are set for delivery by 2030.
The majority of the new supply will be concentrated in Dubai Hills Estate, Business Bay, Downtown, Jumeirah Village Circle (JVC), Al Furjan and Dubai Marina.
While the least new supply will come in villa communities such as Al Barari, Dubai Production City, Dubai Residence Complex, Tilal Al Ghaf, among others.
As supply increases in certain sub-markets, landlords are becoming more strategic as well to attract and retain tenants.
Moyes stressed that competition is encouraging greater flexibility in lease terms, including broader acceptance of multiple-cheque payments, digital payment solutions and more tailored lease structures based on tenant profiles.
“Older buildings are increasingly offering selective incentives, such as minor upgrades or enhanced maintenance packages, to remain competitive with newer developments. These practices are expected to become more widespread by 2026, contributing to a more tenant-centric rental environment aligned with global leasing standards,” she said.
Which areas will see rents rise faster, and which slower?
Rental demand will continue to be driven primarily by population growth and the steady inflow of new expatriate residents, most of whom initially enter the market as tenants. The emirate’s population crossed four million mark this year, the highest in the city’s history.
“This dynamic will sustain demand in lifestyle-led, well-connected communities close to employment hubs, reinforcing investor confidence in established locations such as Arabian Ranches, Dubai Hills Estate, Business Bay and Palm Jumeirah,” added Moyes
In addition, prime areas such as Downtown Dubai, Palm Jumeirah and Dubai Marina are likely to maintain rental strength in 2026.
Georgina Moyes added that family-oriented neighbourhoods in Dubai with strong connectivity to schools, business districts and transport links will continue to see intense competition, supporting healthy and sustainable landlord yields. By contrast, areas with a high volume of new handovers may see increased pressure on older or non-upgraded stock.
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Stay tuned as this line continues to rise from blueprint to bustling reality — and get ready to explore Dubai with even greater ease in the years ahead!
News Source https://www.khaleejtimes.com/business/property/dubai-rents-increase-6-2026-population-growth?_refresh=true
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