The Big Short Series | The Freefall of Long-Term Rentals | Episode 3

The Big Short Series

The Big Short series by AirDXB provides an in-depth analysis of Dubai’s real estate market, highlighting critical trends and shifts affecting investors, landlords and tenants. This series uncovers data that often goes unspoken, offering clear insights into market dynamics and strategic opportunities within Dubai’s property sector. Drawing from market data, reports, and diverse sources, AirDXB delivers thoughtful analysis in each episode. Be sure to explore the previous episodes for a comprehensive understanding.

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‍Long-term Rental Freefall: Red Across the Board: Dubai Lettings Market in Steep Decline

Dubai’s villa and townhouse rental market is is in the red according to Espace H1 report. Year-on-year, transaction volumes have declined across most major communities, with both new contracts and renewals dropping significantly. The Meadows and Jumeirah Golf Estates saw some of the steepest falls, each reporting a 20% decrease in new rental contracts, alongside notable drops in renewals. Green Community was hit hardest, with a 37% decline in new leases and a 26% drop in renewals, suggesting a sharp dip in demand. Arabian Ranches 2 also experienced double-digit losses across the board. Palm Jumeirah stood out as the only area to show growth in new contracts, up by 16%, although renewal activity there fell by 29%.

This clearly shows that people aren’t renting properties and when there’s no demand, transactions drop. As a result, prices will have to come down to spark interest and bring tenants back into the market. - Gregory Lewis, The Big Short Episode 3

In line with this trend Allsopp & Allsopp’s internal data for H1 2025 reports a 28% decline in lettings volume compared to H2 2024, and a 27% year-on-year decrease from H1 2024, reflecting a notable slowdown in their rental activity.

Rental Contracts In The Red

AirDXB Real Estate & Short-Let Market Report Q2 2025 highlights a consistent decline in long-term rental contracts across all comparables: renewals, new leases, and total agreement, regardless of the time period analysed. This trend clearly indicates a sustained reduction in demand for long-term rentals.

5 Units Launched for Every 1 Delivered

In H1 2025, a total of 81,672 new units were launched, while only 16,744 units were handed over resulting in a launch-to-handover ratio of 4.88. In practical terms, this means that for every one unit delivered to the market, nearly five new units are being added to the pipeline, highlighting a significant imbalance between supply and actual completion.

Cooling Dubai Real Estate Tied to Jobs Decline

The Dubai job market cooling: 2,000 applicants per role, salaries plateau, expat competition intensifies. The National reports UAE faces talent surplus as skilled job seekers grapple with fewer roles, experts say.

Dubai Government's 3 Key Real Estate Supports

The Dubai Government has introduced three major initiatives to support and stimulate its real estate sector. The First-Time Investor Scheme targets properties up to AED 5 million, offering easier payment plans and financial guidance to make homeownership more accessible, with the goal of attracting 5,000 new investors in 2025 and supporting long-term market sustainability. The Real Estate Tokenisation initiative, launched in March 2025 by the Dubai Land Department, the first of its kind in the Middle East. It is expected to account for AED 60 billion (US$16.3 billion) or 7% of all transactions by 2033, backed by major partnerships including DAMAC & MANTRA (US$1B), MAG & MANTRA (US$500M), and MAG, MultiBank & Mavryk (US$3B in luxury on-chain projects). In parallel, the UAE Ministry of Finance has introduced tax breaks for investors, allowing companies to deduct real estate depreciation from taxable income, an incentive designed to drive greater corporate investment into the property market.

Check out the full video above for a deep dive on The Freefall of Long-Term Rentals