The gap between renewal and new-lease rents in Dubai's active real estate market is narrowing as landlord competition intensifies amid an influx of new residential units. This brings good news for tenants who have been witnessing incessant rent increases over the past five years.

According to real estate advisory firm Colliers, the Dubai rental market“is exhibiting greater segmentation, both across communities and within specific buildings and unit categories.”

“A clear divergence is emerging between established, supply-constrained communities and areas seeing a surge of new completions. In recently delivered developments, competitive pricing among landlords is placing pressure on rents, leading to a narrowing of the premium traditionally seen between new leases and renewals,” Colliers' analysts said in the third quarter of 2025 report.

According to Betterhomes, the average annual leasing price showed modest 4 per cent year-on-year growth in the third quarter, but a noticeable 15 per cent quarter-on-quarter decline, suggesting a market stabilization after earlier highs.

Due to a higher number of project launches over the past five years, the emirate's property market is witnessing an increased supply of new residential units, especially apartments.

In Q3 2025, approximately 8,100 apartments and 1,650 villas were handed over, Colliers said.

According to Property Monitor data, Dubai's new project pipeline remained exceptionally strong, with 65 launches introducing more than 14,000 residential units valued at an estimated Dh33.5 billion in October.

It said 532 projects have been launched in the first 10 months, bringing nearly 131,504 units to market, levels that far exceed what would traditionally constitute an entire year of activity.

A total of 228 developers have launched projects so far in 2025, up from 163 during the same period in 2024, underscoring the expanding depth of supply-side participation.

Colliers' analysts said many landlords are responding proactively by upgrading or furnishing their properties to enhance differentiation.“These improvements, often focused on delivering modern specifications, have enabled owners to attract tenants willing to pay a premium for modern, move-in-ready units. This, in turn, continues to contribute to overall average rental growth,” it said, adding that despite the overall strength in rental performance, tenants are becoming more price sensitive.

“Some remain prepared to absorb moderate rental increases, thus avoiding the disruption and cost of relocation. These dynamics reflect a maturing rental environment, one increasingly defined by informed decision-making, quality differentiation, and value-conscious occupancy trends,” it said.

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