Rental Yields in Summer 2025: Are Landlords Seeing Bigger Wins Than in 2024?

Dubai’s real estate market continues to evolve in 2025, and landlords are feeling the changes; especially when it comes to rental yields. While the market remains strong overall, a steady rise in new developments and shifts in demand are impacting rental performance.

Short-Term Rentals – A Slower Pace with Smarter Strategy

In areas like Business Bay and Downtown Dubai, short-term rentals are seeing a slight slowdown, now in June. With more units entering the market, hotel style rates have dipped by around 15%, and occupancy is down by roughly 25% during peak summer months. In response, many landlords are pivoting to long-term leases for more consistent returns and less volatility.

Tourism & Events

Conferences and shopping festivals continue to attract both tourists and business travellers; particularly in Downtown, where easy access to transport and retail remains a strong attraction. To stay competitive, landlords are offering perks like flexible lease terms to keep occupancy rates steady.

Long-Term Leases: A Stable Option

For those leaning into long-term tenants, the outlook is solid. Studios in Business Bay are averaging AED 73,000 annually, while Downtown Dubai commands around AED 84,000. These figures reflect modest growth, signalling a healthy demand in the long-term segment.

Tenant Trends that are Shifting Towards value

We’re seeing more tenants relocate from premium areas to mid-tier neighbourhoods like JVC and Dubai Sports City. One-bedroom apartments in JVC now average AED 70,000 annually, offering better value without compromising on lifestyle. This shift is driving a 7.7% year-on-year rent increase in the area.

Finding a Balance in Rental Prices

Overall, the 2025 rental market is showing signs of balance. While summer slows short-term bookings, long-term leasing is holding strong. With 72,000 new residential units expected this year, supply is gradually catching up to demand, easing pressure on pricing and giving tenants more choice.

The 2025 Outlook: Flexibility Is Key

Landlords this year are navigating a dynamic market. Short-term homes come with seasonal swings, while long-term rentals continue to offer reliable income. Those who stay flexible and adapt to shifting trends, through smart pricing, better services, and proactive management, are in the best position to maximise returns.