Dubai’s residential rental market recorded strong activity during the first nine months of 2026, supported by a wider range of housing options, the completion of new residential projects, and well-developed infrastructure and services across several communities. New rental contracts were the main driver of market growth during this period.
An analysis by fäm Properties showed that the five busiest rental areas in Dubai recorded approximately 114,300 contracts between January and September 2026. Newer residential communities also posted notable increases, with Al Hebiah Second leading the way after recording annual growth of 47.6%.
More Than 114,000 Rental Contracts Recorded in Dubai’s Leading Areas
Warsan First, Jebel Ali First, and Al Barsha South Fourth were among the most active areas for rental contracts, benefiting from a large supply of residential properties, different housing options, and a range of rental prices.
Business Bay and Dubai Marina also remained popular residential destinations, supported by their central locations, proximity to major business districts, transport connections, and established facilities.
Al Hebiah Second Leads Rental Growth at 47.6%
Al Hebiah Second recorded the highest growth in rental contracts among a group of newer residential communities, posting a 47.6% year-over-year increase during the first nine months of 2026.
Al Hebiah Fifth followed with growth of 26%, while Wadi Al Safa 3 recorded a 25.7% increase.
Rental contracts also rose by 16.8% in Dubai Creek Harbour, 12.9% in Sheikh Mohammed Bin Rashid Gardens, 11.7% in Nad Al Sheba First, and 11.1% in Al Merkadh, reflecting growing rental activity across several residential areas.
New Residential Projects Boost Dubai’s Rental Market
The handover of newly completed homes helped increase rental activity, particularly in communities where several residential developments have recently been delivered.
Al Yufrah 1 recorded a 144% year-over-year increase in registered rental contracts, while the number of new contracts nearly tripled following the delivery of approximately 1,290 residential units since the beginning of 2025.
Umm Suqeim Third also recorded a 48% increase in rental registrations as additional residential units entered the market.
Competitive Rental Prices Give Tenants More Housing Options
Competitive rental prices have helped attract tenants to newer residential communities, particularly families looking for larger homes at more affordable annual rents.
According to the analysis, the average annual rent for villas in these areas, most of which have four or five bedrooms, stands at approximately AED 150,000. This compares with an average of AED 270,000 for four-bedroom villas across Dubai.
Two main factors are behind this activity. The first is the completion of residential projects purchased off-plan in 2022 and 2023, while the second is the rental value offered by newly available homes.
One-Bedroom Apartments Remain the Most Popular Choice Among Tenants
Studios and apartments with up to two bedrooms accounted for approximately 90% of all new rental contracts in Dubai during the first nine months of 2026.
One-bedroom apartments were the most sought-after option, representing 43% of new rental agreements.
The average annual rent for a studio reached AED 45,000, compared with AED 70,000 for a one-bedroom apartment and AED 110,000 for a two-bedroom apartment.
For larger properties, three-bedroom apartments recorded an average annual rent of AED 180,000, while four-bedroom villas averaged AED 270,000.
Smaller Apartment Rents Remain Stable as Larger Homes Become More Affordable
Rental data showed relatively stable prices for smaller residential units. Annual increases in new contracts for studios and one-bedroom apartments ranged between 2% and 3%, while rents for two-bedroom apartments remained unchanged.
Larger homes, however, became more affordable. Rents for three-bedroom apartments declined by 5%, while four- and five-bedroom villas recorded decreases of around 11%.
These changes provided tenants looking for more spacious accommodation with better rental options.
Average Apartment and Villa Rents Decline During 2026
The average value of new apartment rental contracts in Dubai fell from AED 70,350 in the first quarter of 2026 to AED 68,400 in the third quarter.
Villas followed a similar trend, with the average value of new rental contracts declining from AED 215,000 to AED 200,000 over the same period, alongside an increase in residential supply.
Moving to a New Home Becomes an Attractive Option in Dubai
Rental renewal prices continued to increase by between 4% and 14%, depending on the property type, while some new rental contracts offered better value in terms of space and cost.
This difference encouraged tenants to consider moving into larger properties. The number of new contracts for three-bedroom apartments increased by 15% year over year, while four-bedroom villas recorded a 32% rise.
Demand for studio apartments, meanwhile, remained stable.
Diverse Housing Supply Supports Dubai’s Rental Market
Firas Al Msaddi, CEO of fäm Properties, said the strongest demand for rental properties is concentrated in established residential communities that offer a mix of housing options, easy accessibility, and relatively flexible price ranges.
He added that these areas include Warsan First, Jebel Ali First, and Al Barsha South Fourth, where a large residential property supply attracts a broad base of tenants. Meanwhile, Business Bay and Dubai Marina benefit from their proximity to major business centers, transport networks, and integrated service facilities.
He continued: “These figures reflect the depth of the rental market in these locations, as areas that offer a wide and diverse selection of apartments and have well-established infrastructure are capable of achieving high transaction volumes because they can meet the needs of different groups of tenants, rather than relying on just one category of demand.”
Al Msaddi explained that recently completed buildings in the areas recording the highest rental contract growth among newer residential communities have contributed additional rental units to the market.
He said: “In all cases, growth came from new rental contracts, not renewals of existing agreements. New rental contracts more than doubled in Al Hebiah Second, increasing by 107%, and rose by 73% in Wadi Al Safa 3, as tenants moved into newly handed-over buildings.”
He added: “Among the larger rental markets, Al Barsha South Fourth (Jumeirah Village Circle) recorded the biggest increase in the number of contracts in absolute terms, followed by Al Barsha South Third and Al Merkadh.”
