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Dubai: More residents eye home ownership as lease renewals drop by 30%
To cash in on the growing demand for property ownership, developers are coming up with innovative payment plans to woo new buyers
Property ownership continues to gain momentum in Dubai as more and more tenants are opting to buy homes due to rising rentals, according to new data.
To meet rising demand from tenants who are moving to ownership, well-established developers have introduced aggressive payment plans, with structures reaching as high as 80/20.
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Quoting Dubai Land Department data, Allsopp & Allsopp said Dubai recorded a 30 per cent drop in month-on-month rental renewals in February, suggesting a potential shift in the Dubai property landscape.
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“It’s more than just short-term interest now. The clear decrease in rental renewals, combined with the strong growth in villa sales, shows that people are making long-term commitments. They're moving beyond renting and choosing to settle here,” said Lewis Allsopp, chairman of Allsopp & Allsopp.
Rents in Dubai have been on the rise in the past four years, more than doubling in some of the communities due to the inflow of new residents. In addition, demand is outpacing supply which is resulting in an incessant increase in rentals in the emirate, prompting tenants who have made Dubai their home to shift to ownership.
“Dubai's property market is offering more than just investment returns, it's offering a place to call home. This shift towards long-term ownership reflects the city's international appeal and the confidence people have in its future,” said Allsopp.
Affordable rental communities in demand
Randy Fink, CEO of property, community management and valuation and advisory at Asteco, said the UAE rental market recorded sustained growth throughout 2024, driven by positive market sentiment and strong demand.
“As rental rates continued to rise across all sectors and areas, the quest for affordability drove increased rental growth and activity in the lower and mid-end segments. This trend benefited affordable communities in Dubai and Abu Dhabi, along with the Northern Emirates, which attract tenants with their competitive rents, expanding supply of quality developments, improved infrastructure and enhanced accessibility. The flexibility of hybrid working arrangements has further supported this migration,” added Fink.
Allsopp & Allsopp's February Market Snapshot revealed a 105 per cent year-on-year surge in villa and townhouse sales value, driven by a decisive shift towards long-term homeownership. This marks a move beyond short-term investment, as residents increasingly choose to plant roots in the city.
Developers woo new buyers
To cash in on the growing demand for property ownership from tenants and foreigners relocating to Dubai, developers are coming up with innovative payment plans to woo new buyers.
As per real estate consultancy Asteco, some developers, particularly Tier-1 brands, introduced aggressive payment plans, with structures reaching as high as 80/20 or 75/25. It is worth noting that towards the end of 2024, there was a rise in the number of developers offering sales incentives such as lower down payments, extended payment plans and discounts on service charges.
On Tuesday, Dubai’s largest private developer, Damac Properties, also announced offering UAE residents bank financing for off-plan projects once construction reached 35 per cent completion.
Usually, home financing in off-plan projects is offered when the project reaches 50 per cent of the construction phase.
Amira Sajwani, managing director of sales and development at Damac Properties, said this is a game-changer for residents and investors in the UAE.
“It is also a testament to our unwavering commitment to making homeownership a reality for many residents. We are thrilled to be the first developer in the UAE to introduce this solution, which makes luxury living even more accessible and sets a new standard for financial flexibility in real estate investment in the UAE,” said Sajwani.
Waheed Abbas
Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.
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