Dubai’s rental market hit an all-time high in June, with both new tenants and existing residents renewing leases driving contract numbers to record levels, as property sales climbed across all segments.
A market analysis from fäm Properties showed 40,022 rental contracts were registered in June, the highest monthly total on record. New contracts leapt 48.6 per cent year-on-year to 19,245, while renewed contracts rose 28.5 per cent to 20,777.
“It would be a mistake to reduce it to tenants simply moving between units. What stands out is that renewals are equally robust. We are seeing new demand entering the market and existing demand deepening at the same time,” said Firas Al Msaddi, CEO of fäm Properties.
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Al Msaddi attributed the surge to renewed confidence following months of regional tension.
“What they witnessed was a testament to this country’s resilience, agility, and wisdom, and that brought confidence back stronger than before,” he said, adding that pricing had also turned in tenants’ favour amid a wave of newly handed-over projects.
Al Msaddi pointed to long-term leasing as the clearest emerging trend, now reaching the ultra-luxury segment – a shift he described as rare until recently, with annual leasing contracts once largely confined to the affordable and mid-market segments now moving firmly into the ultra-luxury bracket.
Firas Al Msaddi said Dubai’s ultra-luxury villa market is witnessing a marked shift towards long-term leasing, with owners increasingly choosing to hold and rent out their properties rather than sell them.
In the past two months alone, fäm Properties has leased two villas in Al Barari on two-year terms. One was leased for Dh14 million over two years, working out to Dh7 million annually, while the other was leased for Dh7.2 million over two years, or Dh3.6 million a year.
“So, this demand is not confined to the affordable segment. The most distinguished signal in the market right now is demand for long-term annual leases on ultra-luxury property,” he added.
Al Msaddi said the trend reflects a deeper shift in owner sentiment. Many of the villas involved were originally built for sale rather than for rent, but their owners are now reconsidering that approach in light of the market’s long-term trajectory.
“The owners of these villas, assets originally built for sale, not for rent, believe in the long-term trajectory of this market. That belief is making them reconsider,” he said.
“Rather than push to sell in today’s conditions, many are choosing to hold and lease, because serious long-term tenants are willing to pay top-tier rents for these homes,” Al Msaddi said. “The conviction of the owner is now shaping supply as much as the demand of the tenant,” he added
