Rents in Dubai: Tenants shifting to short-term rentals to look for affordable units

Tenants in Dubai are temporarily shifting to short-term rentals, expecting rents to soften further before committing to a new annual lease, according to an industry executive.

Rents across the UAE have been softening over the past few months after a five-year rally, driven by a massive increase in population.

According to CBRE, rental growth continues to soften, entering the third consecutive quarter of a broader period of stabilization in the first quarter of 2026.

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“Many Dubai residents are using short-term rentals as a flexible bridge. Some are hesitant to commit to a standard one-year lease because they want to see how the geopolitical situation stabilises. Others are watching the rental market closely, betting that prices might soften further, and they use our units to stay ‘liquid’ in their housing choices by opting for paid weekly or monthly accommodation options,” said Rohollah Rohparwar, co-founder and managing partner at First Class Property Management.

Rohparwar said there has been a massive spike in stay duration.

“Before the market shifted, only about 7 per cent of our bookings were for 29 nights or more. Today, that figure has jumped to 68 per cent. We are essentially selling managed living rather than just a holiday stay,” he said, adding that people used to plan their lives a month in advance in a just-in-time model. “Now, about 80 per cent of our reservations are made within six days of arrival, often on the same day.”

Vinayak Mahtani, CEO of Bnbme Holiday Homes, said many tenants whose annual contracts are due for renewal are not signing them because they know that long-term rents will fall further in the next six months.

“People are actually moving into short-term rental apartments and then continuing to look for a good deal elsewhere. For example, we had a tenant who was paying Dh170,000 in rent. They started with us in April. They just told us that they're going to move out in May because they found something in the same building for Dh135,000. So they got around a 20 per cent discount,” he told Khaleej Times in an interview on Wednesday.

Residents replacing tourists

Mahtani added that the business has shifted from tourism and online travel agents to domestic residents.

Rohollah Rohparwar said residents now dominate the short-term rental market as fewer tourists are in the market.

“We saw a complete inversion of our guest profile within the first week of the regional escalation. Normally, our portfolio is fuelled by international holidaymakers, but as those arrivals slowed, a ‘resident migration’ took their place,” he said.

Rohollah Rohparwar said residents are moving into prime areas like Downtown or JBR because they can now access a luxury lifestyle for roughly half the cost of a traditional long-term lease.

In addition, areas such as JVC, Furjan, and Arjan, which have a large supply of studio and one-bedroom apartments, have also seen a big increase in demand.