Rental Renewals Cheaper Than New Leases

Dubai tenants are largely choosing to renew their rental contracts, even with rent increases, due to the high costs associated with moving. Leasing agencies and property portals report that renewals significantly outnumber new leases, with many tenants opting to stay put despite rising rents. The primary reason is the overall expense of relocating, including agency fees, moving costs, security deposits, and setup expenses.

The current market dynamics favor landlords, as demand remains strong, and new listings rarely offer significant bargains. The new Dubai Rental Index, while intended to bring balance, has also introduced a "rental premium" for newer properties, further influencing tenants' decisions. These newer properties often come with higher base rentals due to their features and star rating benchmarks.

Despite the influx of new apartments, landlords still hold the advantage, with multiple inquiries for each new rental unit. Tenants are aware of the rental index and check if renewal offers are within range. However, they often choose to renew rather than face the uncertainty and costs of moving, even if the rent is slightly higher.

Industry experts predict it will take several months for the market to fully adjust to the new rental index. Until then, renewing leases will likely remain the preferred option for most Dubai tenants, as landlords continue to benefit from this trend.