Dubai rents drop over 12% as new launches fall sharply

Published on Tuesday 13 October 2026 at 10:35 AM

Rental market trends

Apartment rents in Dubai Marina, Business Bay and Jumeirah Village Circle (JVC) recorded double‑digit declines – the steepest among Dubai communities – in the third quarter of 2026 as the property market softened, according to Savills’ Q3 2026 report.

Data showed year‑on‑year falls of 12.8 per cent in Marina, 12.2 per cent in Business Bay and 10.4 per cent in JVC for the July‑September 2026 period.

Other residential areas with notable rent drops were Al Furjan (7.5 per cent), DIFC (7.3 per cent), Majan (5.1 per cent), Discovery Gardens (4.3 per cent) and International City Phase 2 and 3 (0.4 per cent).

Among villa and townhouse communities, Arabian Ranches 3 fell 15 per cent and Damac Lagoons slipped 13.4 per cent, accounting for two of the three steepest annual declines. Savills noted that annual rental pressures remain evident in this segment.

The report said the relatively modest quarterly movements “suggest early signs of stabilisation”, although the trend remains uneven across locations.

Total rental transactions rose 16 per cent quarter‑on‑quarter to 181,900 in Q3, up from 156,200 in Q2 and broadly in line with the 180,600 recorded in Q3 2025.

The share of new leases increased to 44 per cent from 36 per cent in Q2, supported by stronger new‑leasing activity in Business Bay, JVC, Jumeirah Village Triangle and Downtown Dubai.

Sales market performance

In the sales market, Dubai recorded 34,500 residential transactions in Q3, down 4 per cent on the previous quarter and 38 per cent year‑on‑year.

Transacted value fell to Dh70.8 billion, down 14 per cent from Dh82.6 billion in Q2 and 46 per cent from Dh132.2 billion a year earlier.

The decline was concentrated in off‑plan sales, where value fell to Dh45.7 billion from Dh61.3 billion, while ready‑market value rose to Dh25.1 billion from Dh21.3 billion, a shift Savills said points to stronger momentum in completed properties.

Average apartment prices slipped 4.8 per cent on the quarter to Dh1,817 per square foot, while villa and townhouse prices fell 3.3 per cent to Dh1,523.

Activity was concentrated, with the top five developers accounting for 47.9 per cent of transactions. Azizi Developments led with 21 per cent, ahead of Emaar Properties (9 per cent), Damac Properties and Binghatti (7 per cent each) and Imtiaz (4 per cent).

The top five communities captured 33.7 per cent of deals, led by Azizi Venice at 12 per cent.

Supply and outlook

Only about 5,000 units were launched in Q3, taking launches for the first nine months to around 50,000, roughly 64 per cent below the 137,300 launched in the same period last year.

About 26,500 units were handed over in the first half of 2026, around 85 per cent of them apartments. Savills expects a further 50,000 to 60,000 in the second half, taking 2026 deliveries to between 75,000 and 85,000, with the remainder likely to slip into 2027.

Rachael Kennerley, Director of Research at Savills, described the market as entering “a phase of rebalancing rather than a reversal”.

Savills expects lower launches and delayed completions to ease near‑term supply pressure. However, more than 525,000 units are scheduled for delivery between 2027 and 2030, making population and household growth increasingly important for absorption.