Dubai Rental Market Shifts as Tenant Incentives Diminish Amid High Occupancy
Dubai, UAE – Tenants in Dubai are experiencing a shift in the rental market as incentives like rent-free months and early move-in grace periods dwindle amid high occupancy rates. With rents consistently rising in most areas over the past few years, landlords enjoy high demand, reducing the need for such incentives.
Real estate industry executives note that while landlords are willing to spread the rent over multiple cheques, this often results in tenants paying a higher overall rental price. Jacob Bramsley, leasing manager at Better Homes, stated that incentives such as one month of free rent or early move-in grace periods are now rare due to high occupancy rates.
Paul Kelly, operations director at Allsopp & Allsopp Group, echoed this sentiment, stating that there are fewer incentives than in 2020 as landlords no longer need to offer them. The emirate’s population reached 3.65 million in 2023, growing by 100,000 over the previous year, further driving demand for rental properties.
Alois Kugendran, general manager for real estate at Huspy, explained that the need for more available homes has created a market that heavily favours landlords, making it difficult for tenants to secure a property. He noted a significant reduction in the number of incentives on offer.
Alina Adamco, head of sales at Metropolitan Homes, stated that in established situations, landlords typically do not need to offer incentives for renewal, though mutually agreeable terms are always an option. However, new buildings facing immediate oversupply and competition may provide incentives to attract tenants.
According to Karun Luthra, vice president for global operations at Foremen Fiefdom, high occupancy and rising rents give landlords the upper hand in Dubai. Traditional incentives like free rent might become less common as landlords focus on attracting long-term tenants and emphasising property quality.
Overall, the trend indicates a decrease in the use of incentives as landlords leverage high occupancy rates to maintain rental prices and improve returns. Some landlords are happy to help tenants spread the rent over multiple cheques, ultimately increasing their overall return on investment.