Impact of short-term rentals on Dubai’s real estate market in 2025
Impact of short-term rentals on Dubai’s real estate market in 2025 with more people visiting the city than every before, the Dubai real estate market has had to adapt quickly and ensure that all visitor needs are being catered for The future looks bright for Dubai’s real estate market as we look to 2025. 2024 experienced significant growth for the industry, as tourist figures continued to rise, Dubai cemented itself as a popular destination for remote working and an influx of new businesses were established in the emirate. 2025 looks to be no different and as it stands the first quarter of the year is set to be one of the busiest yet.
Dubai’s real estate market is feeling the impact of the short-term rental industry driving growth across popular tourist, business and residential districts. Prime locations like Downtown Dubai, Dubai Marina, and Palm Jumeirah remain in high demand throughout the year and are encouraging positive growth across these areas. With proximity to tourist attractions, world-class dining and nightlife, entertainment hubs, public transport, business districts and close to the city’s beautiful beaches these neighborhoods are the ideal locations for visitors to base themselves from.
Dubai’s short-term rental surge
Across the board, the short-term rental market is helping to bolster Dubai’s overall occupancy rates. With fewer available apartments on the market, investors are seeing good bang for their buck with increased rental income and therefore better yield values. Peak season is a fantastic time for property owners to capitalise on their investments with seasonal pricing in play. Looking to 2025, we will see further development of this trend as Dubai’s status as an evergreen destination continues to grow, attracting more investors and visitors.
The short-term rental market has played a significant role in expanding Dubai’s real estate offering in terms of catering to a variety of budgets and requirements. The hotel industry has also been impacted in the emirate which is evident with the introduction of several packages including monthly stay options for business / longer-term travellers and those whose needs move beyond traditional hotel stays. With this increase in popularity for short-term rentals, the Dubai real estate market has had to adapt quickly and ensure that all visitor needs are being catered for. We are also seeing more monthly payment terms for renters as property owners understand the need for shorter-term rolling contracts.
Savvy investors have leveraged the boom in short-term rentals by buying and converting properties into short-term rentals that appeal to a wide audience. These investments have benefited property owners on a significant scale, and in turn are boosting the local economy. Generating revenue for local businesses, short-term rentals are having a positive knock-on impact on those around them whether that’s grocery stores, cafes, restaurants, malls and more.
Overall 2025 is set to be a prosperous year for the short-term rental market in Dubai with strong demand and this in turn will continue to reap rewards for the real estate market too. There are plenty of opportunities in the sector and smart investment choices to be made by those who look to take advantage of the growing market.