The Long Term Rental Market is Cooling in Dubai: How Property Owners Are Responding

Dubai’s property market is evolving, the latest data from Property Monitor confirms what many property owners in Dubai are already noticing: long term rental contracts are on the decline. Between Q4 2024 and Q4 2025:

• Total contracts dropped from 156,781 to 147,824 (‑5.72% YoY)
• New contracts fell from 60,553 to 57,936 (‑4.32% YoY)
• Renewals decreased from 95,819 to 89,485 (‑6.61% YoY)

This shift highlights that traditional long term rental strategies are becoming less attractive for investors. With rising supply and changing tenant expectations, property owners in Dubai are increasingly reassessing how they generate income from their assets.

Why Long Term Rentals Are Losing Appeal

Several factors are contributing to the cooling of the long term rental market:

1. Declining Demand for Long Term Leases
More residents and expatriates are seeking flexibility over committing to long term contracts. The rise of remote work, short term employment contracts, and transient living patterns is reducing the pool of long-term tenants.

2. Increased Competition
New developments continue to flood the market, leaving landlords with the need to offer concessions or lower rents to secure tenants. This has created a more competitive environment, compressing yields for long term rental properties.

3. Evolving Investment Expectations
For property owners in Dubai, the predictability of long term rental income no longer guarantees strong returns. Many are exploring alternative strategies to maintain profitability in a rapidly changing market.

Short Term Rentals: A More Attractive Option

In contrast, the short term rental market is thriving. AirDXB’s data shows that professionally managed short lets consistently outperform long term leases in both occupancy and returns:

• High occupancy rates – AirDXB achieves up to 94% occupancy for managed short term rentals.
• Stronger financial returns – In prime locations like Downtown Dubai, Dubai Marina and Palm Jumeirah, short term rental income can exceed long term rental income by 30–50%.
• Tourist-driven demand – Dubai draws 17.5 million tourists through November 2025, creating consistent demand for short term stays.

What This Means for Property Owners Dubai

• Review Your Yield Strategy: With long term rental growth slowing, short term rental returns may provide higher gross income and improved cash flow in well‑managed scenarios.
• Leverage Professional Management: Short term performance depends on dynamic pricing, guest experience and compliance with licensing—working with an expert partner like AirDXB can maximise revenue and reduce management burden.
• Capitalise on Tourism Trends: Dubai’s year‑round calendar of events and business travel supports strong short stay demand, complementing traditional leasing models.

Conclusion

The decline in long term rental contracts in Dubai reflects a broader market shift. Meanwhile, short term rentals are gaining traction as a compelling income‑generating alternative that aligns with modern lifestyle trends and robust tourism growth. Property owners Dubai who adapt by exploring short lets and professional management are positioning themselves to maximise returns in a shifting real estate landscape.

Don’t just take our word for it. Property Monitor shows that long term rentals in Dubai are down across new, renewed and total contracts