Hundreds of thousands face rising rental costs as Dubai housing demand surges

Dubai’s rental market held firm through the first seven months of 2026, with more than 214,445 tenancy contracts registered across the emirate, a 1.9 percent rise from the same period a year earlier. For the hundreds of thousands of residents who call Dubai home, that figure carries a straightforward meaning: people are choosing to stay.

The data comes from fäm Properties, a Dubai-based real estate firm that tracks market activity. July alone produced 38,197 rental contracts, split between 18,431 new agreements and 19,766 renewals. The renewal figure is the more telling of the two. Firas Al Msaddi, CEO of fäm Properties, put it plainly: “The volume of renewals alone shows that, regardless of regional uncertainty over the last few months, people still see Dubai as one of the best places in the world to live and work. The level of rental activity overall is a good sign of market resilience.”

That resilience matters to ordinary residents navigating a housing market shaped by geopolitical pressures elsewhere in the Middle East. Stability in lease volumes offers a degree of predictability for tenants weighing whether to renew, relocate, or absorb rising costs.

One-bedroom apartments remain the unit of choice, accounting for 41 percent of all rental agreements registered through July, roughly 88,327 contracts. Two-bedroom units captured 23 percent of agreements, and three-bedroom units represented 10 percent. The skew toward smaller units reflects the practical housing needs of Dubai’s broad renting population.

Certain neighborhoods have absorbed the bulk of that demand. Al Warsan led with 20,830 contracts registered so far this year, followed by Jebel Ali First at 18,478 and Al Barsha South Fourth at 16,489. Business Bay and Nadd Hessa rounded out the top five, recording 13,728 and 11,710 contracts respectively. The spread across multiple districts suggests that affordable and accessible housing options are drawing tenants well beyond the city’s most prominent postcodes.

Meanwhile, the sales market kept pace. July transactions totaled 13,872 deals worth 34.5 billion United Arab Emirates dirhams. Off-plan purchases dominated, accounting for 9,585 transactions valued at 20.5 billion dirhams. Resale transactions numbered 4,287, valued at 14 billion dirhams.

A regulatory change now reshaping daily life for many renters deserves close attention. The Dubai government introduced a shared housing law set to take effect on August 26. The regulation requires formal authorization for the common practice of subletting bedrooms or bed spaces to third parties. Critically, renters may no longer independently rent out a room or portion of their apartment without written approval from the landlord. The law brings previously informal arrangements into a regulated framework and gives property owners greater control over how their units are used.

For residents who have relied on informal room-sharing to manage housing costs in one of the region’s more expensive cities, the practical question is how smoothly landlords will process approval requests, and whether the new requirement will tighten access to affordable shared accommodation.