Rents have been consistently rising in most areas in Dubai over the past few years
Incentives like rent-free months and a grace period allowing tenants to move into property a bit early without having to pay rent have almost disappeared from the Dubai rental market. Reason: Landlords are enjoying high occupancy rates amid the growing population in the emirate.
Real estate industry executives, however, say landlords are willing to spread the rent over multiple cheques though this often results in the tenant paying a higher overall rental price.
Rents have been consistently rising at a double-digit rate in most areas in Dubai over the past few years due to higher demand from the increased population. In addition, developers suspended work on various projects during the pandemic year that led to a slowdown in the supply market.
Jacob Bramsley, leasing manager at Betterhomes, said it is now rare to see incentives such as one month of free rent or a grace period allowing tenants to move into a property slightly earlier without paying rent.
“Due to high occupancy rates, there isn’t as much pressure on landlords to offer such incentives. We are still observing many contracts with multiple cheques, which tends to be where we find more flexibility from our owners, compared to incentives or pricing,” he said.
Paul Kelly, operations director at Allsopp & Allsopp Group, said there are definitely a lot fewer incentives than in 2020 simply as landlords don’t need to. “We can all see how busy Dubai is at the moment, we all know the increasing population and record visitor numbers, it isn’t a market where landlords need to offer an incentive.”
Shortage of houses
The emirate’s population reached 3.65 million in 2023, growing by 100,000 over previous year, due to the inflow of foreign workers, professionals and investors in the post-pandemic period.
Echoing his industry peers, Alois Kugendran, general manager for real estate at Huspy, said incentives like rent-free months are hardly on offer now.
“Population growth has been a primary driver of demand, leading to a shortage of available homes. This has created a market that heavily favours landlords, with limited availability making it difficult for tenants to secure a property. This is a very different scenario compared to 2-3 years ago. Recently, we’ve seen occupancy rates continue to rise despite higher rental prices and a significant reduction in the number of incentives on offer,” he said.
Alina Adamco, head of sales at Metropolitan Homes, said in these established situations, landlords typically don’t need to offer incentives for renewal, though mutually agreeable terms are always an option.
“Newl buildings are a different scenario’:
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