Dubai’s residential rental market recorded an increase in new contracts across several areas during the first nine months of 2026. According to an analysis by fäm Properties, one-bedroom apartments were the most in-demand housing type, accounting for 43% of new contracts, while rents for four- and five-bedroom villas under new contracts fell by around 11%.

The report shows that growth in Dubai’s residential rental market across many areas was driven more by new contracts than by renewals. An increase in the supply of newly built homes, a wider range of housing options and convenient access to business and service hubs were cited as the main factors behind the trend.

According to fäm Properties, the five areas with the highest number of rental contracts between January and September 2026 recorded a combined total of around 114,300 contracts.

Al Warsan 1, Jebel Ali 1 and Al Barsha South 4 topped the list. Business Bay and Dubai Marina also remained key rental destinations because of their prime locations, proximity to business districts and access to transport networks and amenities.

Rental Contract Growth Across Dubai’s Residential Areas

The fäm Properties analysis shows that among several newer residential areas outside the rental market’s five leading districts, Al Hebiah 2 recorded a 47.6% annual increase in rental contracts during the first nine months of 2026.

It was followed by Al Hebiah 5, with growth of 26%, and Wadi Al Safa 3, with an increase of 25.7%.

Rental contracts also increased by 16.8% in Dubai Creek Harbour, 12.9% in Mohammed Bin Rashid Gardens, 11.7% in Nad Al Sheba 1 and 11.1% in Al Merkadh.

Housing Diversity and Strong Infrastructure Drive Tenant Demand

Firas Al Msaddi, CEO of fäm Properties, said rental demand was strongest in established residential communities offering a diverse range of options, convenient access and a relatively broad price range.

He said Al Warsan 1, Jebel Ali 1 and Al Barsha South 4 attract a broad range of tenants because of their large housing stock.

Business Bay and Dubai Marina, meanwhile, benefit from their proximity to major business districts, transport networks and amenities.

Al Msaddi said: “These figures demonstrate the depth of the rental market in these areas. Communities with a wide variety of apartments and well-developed infrastructure can generate high volumes of rental contracts because they meet the needs of different tenant groups and do not depend on a single segment of demand.”

New Rental Contracts Outpace Renewals

The fäm Properties CEO said the completion of new buildings in growing residential communities had increased the supply of rental homes.

He said contract growth in these areas was primarily driven by tenants moving into newly completed buildings rather than renewing existing agreements.

In Al Hebiah 2, the number of new rental contracts rose by 107% compared with the previous year, while Wadi Al Safa 3 recorded growth of 73%.

Al Msaddi added that among Dubai’s major rental markets, Al Barsha South 4, widely known as Jumeirah Village Circle (JVC), recorded the largest increase in contracts by absolute numbers, followed by Al Barsha South 3 and Al Merkadh.

Rental Contracts Surge 144% in Al Yufrah 1

The report shows that several newly developed residential communities where significant numbers of homes have been delivered recorded sharp increases in rental contracts.

Al Yufrah 1 was a notable example, recording annual growth of 144% in rental contracts during the first nine months of 2026.

Following the delivery of around 1,290 homes in the area since the beginning of 2025, the number of new rental contracts nearly tripled.

Rental contracts also increased by around 48% in Umm Suqeim 3 and by nearly 48% in Al Hebiah 2.

In Al Hebiah 2, the completion of several developments pushed the number of new rental contracts to more than double the previous level.

Why Is Rental Demand Rising in Dubai’s Newer Communities?

Firas Al Msaddi attributed the increase in rental contracts in these areas to two main factors.

The first is the increase in housing supply, he said, as many properties bought off-plan in 2022 and 2023 have now been completed and placed on the rental market by investors.

He stressed that contract growth in these areas was driven by newly rented homes rather than renewals of existing agreements.

The second factor is that rents for some homes are more affordable than the Dubai market average.

According to the report, the average annual rent for villas in these areas, most of which have four or five bedrooms, is around AED 150,000. By comparison, the average annual rent for a four-bedroom villa across Dubai is around AED 270,000.

What Is the Average Rent in Dubai?

The fäm Properties analysis shows that new tenants in Dubai typically choose studios and apartments with up to two bedrooms, with annual rental budgets ranging from around AED 45,000 to AED 110,000.

These homes accounted for approximately nine out of every 10 new rental contracts.

Average annual rents under new contracts during the first nine months of 2026 were as follows:

  • Studio apartment: AED 45,000
  • One-bedroom apartment: AED 70,000
  • Two-bedroom apartment: AED 110,000
  • Three-bedroom apartment: AED 180,000
  • Four-bedroom villa: AED 270,000

One-Bedroom Apartments Lead Dubai Rental Demand

According to the report, one-bedroom apartments were Dubai’s most in-demand housing type, accounting for 43% of all new rental contracts.

In the smaller-home segment, rents under new contracts were largely unchanged from the previous year.

Rents for studios and one-bedroom apartments under new contracts rose by only 2% to 3%, while rents for two-bedroom apartments remained almost unchanged.

Rents for larger homes, however, declined.

Rents for three-bedroom apartments fell by around 5%, while those for four- and five-bedroom villas declined by nearly 11% compared with the previous year.

Average Apartment and Villa Rents Decline Since Early 2026

Data from fäm Properties shows that the average value of new apartment rental contracts fell from AED 70,350 in the first quarter of 2026 to AED 68,400 in the third quarter.

Over the same period, the average value of new villa rental contracts declined from AED 215,000 to AED 200,000.

The figures indicate a decline in average rents under new contracts during the period reviewed, although price movements varied by property type and area.

Renewal Rents Rise by 4% to 14%

According to the fäm Properties analysis, while rents under new contracts remained stable or declined in some market segments, rents under renewed contracts continued to rise.

Rental increases under renewed contracts ranged from 4% to 14%, depending on the type of home.

The company said tenants moving to new homes could find better value in some market segments than by renewing their current contracts.

These conditions have encouraged some tenants to move to larger homes.

According to the report, new rental contracts for three-bedroom apartments rose by 15% compared with the previous year, while contracts for four-bedroom villas increased by 32%. Demand for studio apartments remained largely unchanged.

Overall, the analysis of Dubai’s rental market during the first nine months of 2026 shows that increased supply of newly built homes and lower rents in some residential segments created new opportunities for tenants, while rents under renewed contracts continued to rise.