Dubai’s rental market absorbed one of its strongest demand cycles on record in 2025 without triggering inflationary pressure, according to the betterhomes Full-Year Dubai Residential Market Report 2025.

Leasing transactions at betterhomes rose 60% year-on-year, while tenant enquiries increased 36%, yet average rents across the city held at AED 207,000 per year. According to betterhomes, this divergence between volume and pricing reflects a market that is no longer reacting to short-term pressure, but redistributing demand across a wider pool of communities and property types.

The shift is being led by families. Townhouse tenant enquiries surged 200% year-on-year, with leasing transactions up 66%, as renters prioritised space, lifestyle and long-term liveability over central locations. Villas recorded 21% growth in enquiries, while apartment demand rose 28%, indicating that upgrading behaviour, rather than affordability stress, is driving the current cycle.

At the city level, total rental contracts rose 5% to a record 530,000, with 62% of leases being renewals. betterhomes said the high renewal ratio points to a maturing tenant base, where residents are choosing stability and continuity, rather than cycling between homes.

Despite the surge in activity, pricing remained controlled. Apartment rents rose 5% year-on-year, villas 11%, while townhouse rents declined 3%, reflecting the impact of new supply entering family-led communities and a market able to absorb demand without distortion.

“This is what a structurally supported rental market looks like,” said Rupert Simmonds, Director of Leasing at betterhomes. “When volumes rise this fast but rents don’t, it shows demand is being met by the right type of supply in the right locations. Families are driving this cycle, and that creates stability rather than volatility.”