Dubai Property Market Sees Summer Downturn

Dubai's rental market is showing signs of cooling, with prices decreasing in several areas over the past two months, even in more affordable communities. This follows a crackdown on sub-letting and partitioning by authorities and landlords, impacting the availability of certain rental options.

In International City, rents for 1-bedroom units remain stable at Dh48,000-Dh55,000, while studios are around Dh28,000-Dh29,000. Discovery Gardens has seen a 1% decrease in rents over the last two months, with studios ranging from Dh48,000-Dh60,000 and 1-bedrooms from Dh50,000-Dh105,000. Experts note that the crackdown's impact isn't yet fully reflected in real estate data, and rents are unlikely to increase significantly due to the Dubai Rental Index.

Property market sources indicate that both property prices and rents are softening from their 2024 highs. While off-plan launch prices remain high, developers are offering discounts and flexible payment plans. Rental rates for studios and one-bedroom apartments have stabilized in the last three months, although renewals may still reflect increases from the previous year.

The crackdown on sub-letting is expected to create new demand for affordable housing. However, it's anticipated that not all affected tenants will find new rentals in the same areas, potentially leading to relocation to locations like Deira, Al Nahda, Al Quoz, Jebel Ali, and even Sharjah.