Dubai’s real estate market has experienced unprecedented rental growth, driven by a soaring population projected to surge from 3.84 million in early 2025 to 4.50 million by late 2027—an influx of 670,000 residents. This demographic boom, coupled with sustained global investor interest and ongoing developments, has intensified debates about the future of rental prices. While an estimated 125,000 new apartments are expected to enter the market by 2027, this supply falls drastically short of accommodating the population surge, with historic completion rates and competing short-term rental demand further straining availability.
This analysis examines whether Dubai’s rental rates will cool amid upcoming supply or continue rising due to unrelenting demand, focusing exclusively on new rental contracts to ensure clarity. Unlike lease renewals—which are influenced by RERA guidelines and tenant-landlord negotiations—this study evaluates median apartment rents across Dubai’s top neighborhoods, providing a data-driven forecast for 2025–2027. The findings reveal a persistent mismatch between housing supply and population growth, signaling sustained upward pressure on rents citywide, with only localized exceptions likely in over-supplied areas during brief periods.
Projected Population Growth in Dubai
Using our AI models, we performed a trend prediction analysis to forecast the change in Dubai’s population. Dubai’s population is expected to expand from about 3.84 million in early 2025 to over 4.50 million by late 2027. That represents an influx of roughly 670,000 new residents within three years—substantially boosting housing demand across the city. Even accounting for typical household sizes of 2–3 people, Dubai will require a significant amount of new housing to accommodate its growing population.
Correlation Between Population Growth and the Rental Index
As Dubai’s population grows, the demand for housing typically intensifies—driving rental prices upward. The rental index, calculated by averaging median rents across the top 10 most popular neighborhoods, often moves in tandem with population trends. Below is a chart illustrating this relationship from January 2021 through February 2025, helping us draw assumptions about future rent levels.
Rental Index vs. Neighborhood Median Rents
Below is a comparison between the overall Dubai Rental Index and median apartment rents across ten popular neighborhoods. You can select multiple neighborhoods at once or just one to see how each compares against the citywide average. Additionally, use the dropdown (top right) to filter by different time periods (1 year, 2 years, 3 years, or all available data).
Will The Upcoming Supply in Apartments Bring Rents Down?
Roughly 670,000 new residents are expected to move to Dubai in the next three years based on our estimates. While 300,000 new units have been announced over the same period, historic completion rates suggest that number will more realistically be about 125,000 new flats. If you would like to read more about Dubai’s upcoming supply and completion rates, please read our article “Will Dubai’s Property Boom Continue? The 2024 Supply Shortfall Explained – And What’s Next for 2025–2027” .
Even though this represents a substantial wave of new apartments, it still may not keep pace with the rapidly growing population—especially if many of these flats are diverted to short-term rentals like Airbnb rather than long-term residential leases. As a result, our analysis indicates that upward pressure on rents is likely to persist.
Housing Supply Shortfall
Unit Mix Analysis (125,000 total units)
~37,500 units
~1.5 people each
56,250 people
37,500 units
~2 people each
75,000 people
31,250 units
~4 people each
125,000 people
18,750 units
~6 people each
112,500 people
Will Dubai’s Rents Decrease?
While Dubai’s population growth (projected to reach 4.5 million by late 2027) will drive sustained housing demand, the 125,000 new units expected by 2027 fall far short of accommodating the estimated 670,000 new residents. This mismatch suggests ongoing upward pressure on rents citywide. However, localized dynamics could create temporary exceptions:
Rental Market Forecast Timeline
2025
Continuing Upward Trend
Continued citywide rent increases driven by robust population growth and limited new supply.
2026
Brief Cooling Period
Localized cooling in neighborhoods with heavy completion rates as landlords compete for tenants.
2027
Renewed Inflation
Population growth and absorption of new units reignite citywide rent inflation. Only dramatic construction acceleration (>200K units) could change this trajectory.
Recommendations
For Tenants
- Consider Longer Leases to mitigate frequent rent hikes
- Monitor New Supply if you’re eyeing emerging districts
- Stay Informed about RERA rules on lease renewals
For Landlords
- Optimize Rent while demand is strong
- Secure Multi-Year Leases to reduce turnover risk
- Maintain Property Quality to attract premium tenants
Comprehensive Asset Management
Looking to optimize your real estate holdings or manage multiple units? Our professional asset management services are designed to maximize your returns, streamline property operations, and minimize exposure to market risks.
Learn MoreConclusion
Despite the anticipated influx of new apartments—realistically around 125,000 units—Dubai’s booming population growth (nearing 4.5 million by late 2027) is poised to keep rental demand strong.
In certain neighborhoods, especially those with a large share of upcoming completions in 2026, landlords may briefly adjust rents downward to attract tenants. However, these localized dips are expected to be short-lived.
Overall, the mismatch between new housing supply and the influx of roughly 670,000 additional residents should continue placing upward pressure on rents citywide. Unless there is an unexpected economic downturn or a dramatic leap in construction exceeding 200,000 completions annually, a prolonged decline in Dubai’s apartment rents remains improbable.
