Skip to content Skip to Search
Skip navigation

Something has gone wrong in Dubai residential real estate

Policymakers must remember what makes the emirate attractive: value for money and quality of life

People come to Dubai for quality of life and many expect to stay, but the soaring residential rental market is a hurdle Shutterstock/Alex Vog
People come to Dubai for quality of life and many expect to stay, but the soaring residential rental market is a hurdle

I don’t want to move home, but I may have to. My dread at the prospect tells us a lot about the scale of the increases in Dubai residential rents.

For the past four years, I’ve lived in a three-bedroom apartment in the Emaar Towers development in Dubai Marina, and thoroughly enjoyed it.

Most people in Dubai know the “Emaar Six”, as the area is known. It was one of the first residential developments in the Marina, and has proved to be one of the most successful bits of urban infrastructure in town.

Six high rise towers are clustered around communal amenities such as gardens, swimming pools and walkways. It was built to a high standard two decades ago, and has proved popular ever since.

Although rented, my place has felt like home ever since we moved in. With my wife, daughter and small dog, we sat out the pandemic here, and were grateful for the dog-walking facilities that got us out of the house, legally and hygienically. We like it here.

Frank Kane interviewed on Dubai Eye

What happened to upset our lives will come as no surprise to anybody living in Dubai over the past 18 months. Our apartment was sold by its previous owner, an investment company based in Hong Kong, to a new landlord, who promptly gave us notice to quit.

Did he want to move into the apartment himself, or did he want to sell it on? I can’t remember the details exactly now. The matter is grinding through an official arbitration and will be determined soon enough.

So, planning for a move while hoping to avoid one, or at least stay in the same area, we began to look around, and found – joy of joys – the exact same apartment a few floors higher up in my tower.

The removal process if it comes to it will, as usual, be a trial, but will only involve some heavy lifting within the tower block, rather than via the nightmare prospect of road transport. Why, we won’t even need new curtains.

Then came the blow. The “new” apartment (in fact, exactly the same apartment in size and design) costs nearly double my current rent. I calculated it as a 93 percent rise.

This is a sign of the times. It seems unfair that the laws of economics, or demand and supply, or market forces, justify such an increase in the space of an annual tenancy contract. But they do.

Dubai has taken significant steps to limit property speculation, by imposing a 20 percent minimum deposit on property purchases. The market has been through significant ups and downs before, notably in the wake of the 2009 financial crisis, and, more recently, in the pandemic. 

And yes, analysts are predicting a slowdown in rent increases this year as more supply comes onstream. 

But by commendably seeking to control rent increases for existing tenants, the authorities are indirectly encouraging price gouging, inflation and dislocation across the board for new tenants. Legal disputes between tenants and landlords have soared across the emirate. 

My 93 percent rise is the most egregious increase I have yet come across. The expert consensus is that new rents were more than 30 percent higher in 2023, with a further 20 percent forecast for this year.

Even that level, added together a more than 50 percent increase in two years, is unmanageable by any normal standards. Something has gone seriously wrong.

Dubai’s handling of the pandemic was exemplary, and its economic recovery since then has been a textbook case of economic management. 

But it seems to me that the planners and policymakers are in danger of losing sight of what makes Dubai attractive in the first place: value for money and quality of life.

The emirate has just revealed a multi-billion-dollar 10-year plan to make it one of the top three most attractive cities in the world by standard of living. That may be challenging.

People come to the emirate to live and work because they are assured of a decent standard of living, without the burden of income tax, of course, in an environment where they can choose how to spend their cash.

In short, they are expatriates who expected to see out their careers, and beyond, in the UAE.

How can this fit in with the rest of the Dubai strategy? The emirate is looking to double its population to around 6 million by 2040. That will require careful and strategic planning, as detailed in the latest Urban Master Plan.

That project is in jeopardy in the hyper-inflationary chaos currently being endured in residential real estate, where stability is an essential ingredient of a balanced property market.

Meanwhile, I’ll get to measuring the curtains.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He also acts as a consultant to the Ministry of Energy of Saudi Arabia

Latest articles

Head, Person, Face

India’s Adani set to raise $1bn from Middle East wealth fund

Adani Group, led by Indian billionaire Gautam Adani, is in advanced discussions with an unnamed sovereign wealth fund from the Middle East to raise up to $1 billion for its airports business, a news report said. The first tranche of the fundraising will be finalised by the end of the fourth quarter of 2024, Economic […]

Saudi Arabia launches e-karting racing tracks in 6 cities

Six cities in Saudi Arabia are set to get Hot Wheels e-karting racing tracks. The indoor e-karts will be a venture between Saudi Entertainment Ventures (Seven), part of Qiddiya Investment Company (QIC), and US toy maker Mattel. The Hot Wheels e-karting will be available in entertainment complexes such as Riyadh, Makkah, Taif, Al Madinah, Tabuk, and Jazan. In January, Seven […]

Sainsbury's has the second-largest share of the UK grocery market, at 15 percent, behind Tesco at 28 percent

Qatar to reduce stake in UK supermarket Sainsbury’s

Qatar’s sovereign wealth fund is selling part of its 15 percent stake in the British supermarket Sainsbury’s as the fund pushes ahead with expansion in the United States and Asia, particularly China and India. Qatar Investment Authority (QIA), the biggest shareholder in Sainsbury’s, is selling £306 million ($399 million) worth of shares in the retailer, […]

Shoppers in Kuwait's Avenues Mall – the IMF says the country needs to encourage private sector employment

Kuwait needs to push reforms for economic growth, says IMF

Kuwait must accelerate the introduction of fiscal and structural reforms that are needed to increase private sector-led growth and diversify its economy away from hydrocarbons, the International Monetary Fund said on Friday. Kuwait’s economy will contract by 3.2 percent this year because of an Opec+ oil production cut, but will grow by 2.8 percent in 2025 […]