The share of Dubai rental transactions recording a lower rent has more than quadrupled since the start of the year, as record handovers give renters more choice, according to Cavendish Maxwell.

In the third quarter of 2026, 21.4 per cent of rental transactions recorded a rent reduction compared with the prior contract, up from just 4.8 per cent in the first quarter. A further 38.7 per cent renewed at the same rent, while the share recording an increase fell to 40 per cent from 59.4 per cent over the same period.

Cavendish Maxwell said the shift points to diminishing landlord pricing power and greater scope for tenants to negotiate.

Average rents stood at Dh77.3 per square foot per year in September, up 5.5 per cent year-on-year. That is a sharp slowdown from the 11.5 per cent annual growth recorded in September 2025. Rates dipped in the second quarter before recovering in the third to return to their March 2026 level.

More than 172,000 rental contracts were registered in Q3. Renewals totalled 94,300, down 10.6 per cent year-on-year, while new contracts rose 18.2 per cent to 77,700.

The consultancy expects the expansion of available stock to weigh on rental growth going forward, particularly for apartments, which make up the largest share of completions.

Gross rental yields averaged 6.6 per cent for apartments and 4.9 per cent for villas and townhouses in Q3. Apartment yields eased slightly from a year earlier, but remain attractive against other major global residential markets.

(Source: Khaleej Times)