According to Rizwan Sajan, founder and chairman of Danube Properties, the Dubai property market is likely to experience a stable decline of 10 to 20 per cent in rental rates over the next year, following four consecutive years of price growth. Sajan explained in his interview that necessary and beneficial rent corrections during the upcoming year would promote long-term market stability. The real estate market is expected to benefit from a 10-20 per cent reduction in rental costs, as investors are drawn to Dubai due to global developments. Uncertainty worldwide has a positive impact on Dubai. Market stability requires reasonable prices along with rent levels.
Quick Overview
| Features | Details |
| Rent Moderation Outlook | Following double-digit rent increases post-COVID-19, Danube Properties Chairman Rizwan Sajan called a 10–20% easing in lease rates by next year “required and healthy.” He emphasised that moderating rents will sustain Dubai’s appeal to tenants and investors without harming long-term market fundamentals. |
| Robust Supply Pipeline | Property Monitor data shows 7,848 units will be delivered in Q1 2025 alone. The full-year forecast anticipates 71,251 new homes in 2025, rising to 80,015 in 2026, then moderating to 58,766 in 2027. This supply surge is expected to ease upward pressure on rents and lead to modest price corrections in the resale market. |
| Contractor Shortage Warning | While developers accelerate project launches, Sajan warned about a shortage of skilled contractors. He highlighted that securing reputable builders will become more challenging than marketing new projects, which could impact delivery schedules and construction quality. |
| Implications for Stakeholders | Tenants: Greater housing choices and more competitive rental prices are expected. Developers must maintain strong reputations and uphold high construction standards amid a scarcity of contractors. Investors should closely monitor delivery timelines and contractor partnerships when considering off-plan investments. |
| Market Outlook | As Dubai absorbs a large volume of new homes, experts predict a more balanced rental environment and gradual stabilisation of property prices in the coming year. |
Growing Supply to Drive Rental Corrections
The Dubai property market is experiencing initial rental pressure due to rising competition between landlords, along with the implementation of the Smart Rental Index for older properties and the continued expansion of new residential units. Property rental rates are expected to decline more substantially across different communities by 2025. The strong lineup of upcoming projects currently serves as a key factor shaping rental prices in Dubai, according to Sajan.
| Year | Status | Number of Units | Details |
| Q1 2025 | Delivered | 7,848 units | Units have already been completed and handed over in the first quarter of 2025. |
| Full Year 2025 | Forecasted | 71,251 units | Total units expected to be delivered by the end of 2025, adding significant new supply to the market. |
| 2026 | Forecasted | 80,015 units | An even larger supply wave is projected for 2026, which could further impact both rental rates and property prices. |
| 2027 | Forecasted | 58,766 units | Supply is expected to moderate slightly, but a substantial number of new units will still enter the market. |
According to the Q1 report by Betterhomes, this significant amount of new supply will influence property prices and rental rates, while market demand remains vital to observe. Sajan explained that rental rates should undergo corrections starting next year upon completion of the new delivery. The market will experience a price correction, yet developers providing excellent quality and amenities will not face any significant issues. The real estate sector of Dubai receives additional support from the rising investment activities directed toward properties by North American investors, primarily from the United States and Canada.
Shortage of Quality Contractors Poses a Challenge
Sajan noted that developers encounter a significant challenge due to the insufficient number of quality contractors, despite strong market demand. Developers entering Dubai from both local and international sectors have caused an escalating competition for qualified contractors in the market.
Finding a quality contractor can prove to be a challenging task. The search for contractors poses a more demanding task than property sales, due to the abundance among developers, while the number of contractors has remained steady, according to Sajan. According to him, the real estate market cycle motivates contractors to choose well-known developers over others.
The supply of new contracting firms remains lower than the expanding number of developers. Dubai presents abundant market expansion opportunities for contractors since there are more vacancies among contractors than developers,” he pointed out. He suggested that businesses in the Omani, Saudi Arabian, and Indian construction sectors, among others, should launch Dubai operations to serve the growing needs of their clients.
When developers enter the UAE market, Sajan permits them to utilise their preferred contractors. Setting up procedures for building businesses in Dubai follows a straightforward process, which includes company registration, visa processing, labour recruitment, and approval stages. He stated that Dubai represents one of the world’s most favourable locations for conducting business activities and working.
Danube’s Growth
Danube Properties remains among Dubai’s top 10 development companies, delivering numerous housing units to its customers. The company currently has 34 projects in development, having successfully delivered 18 of them, and is continuing with 16 projects at various stages of development. Danube recently introduced the residential tower Sparklz by Danube, featuring 358 units located in Al Furjan. The company increases its market position with its current construction portfolio exceeding 25.5 million square feet in Dubai’s rapidly growing real estate sector.
Find the Best Rental Properties with Eastern Housing UAE
Eastern Housing UAE is dedicated to helping clients find prime rental spaces across the ever-evolving Dubai marketplace. The experienced team at Eastern Housing UAE will help you discover optimal rental properties, as they predict rates will decrease by 10–20% following recent aggressive price increases. The growing competition among landlords, combined with the influx of new residential units entering the market, enables Eastern Housing UAE to secure better rental terms and high-quality properties for its clients.
Conclusion
Current market changes in Dubai’s real estate sector are likely to result in a 10-20% reduction in rental prices over the next year. Market experts view the present rental decrease as both a healthy and necessary adjustment, which will sustain durable market equilibrium. A strong new housing supply pipeline that brings thousands of units to completion serves two primary purposes: it reduces rental costs for tenants while expanding their available choices.
