For anyone buying a property in Dubai for rental purposes, two figures matter most: how much income the rent actually generates and how quickly, or slowly, that value is growing. The first half of 2026 brings an interesting turning point in this respect. After two years of continuous and very rapid rental growth, the pace is slowing down for the first time. At the same time, rental yields in Dubai remain at a level that ranks among the most attractive compared to major global residential markets. The following overview presents the latest rental market and yield data recorded in the first half of 2026, and explains what these figures practically mean for an investor.
Rental Rate Trend
Period | AED/sq.ft/year |
|---|---|
H1 2024 | 62.6 |
H2 2024 | 69.1 |
H1 2025 | 70.2 |
H2 2025 | 77.1 |
H1 2026 | 75.7 |
The table shows the average annual rent per square foot of property. The value rose steadily from H1 2024 to a peak in H2 2025 (AED 77.1), before falling slightly for the first time in the observed period to AED 75.7 in H1 2026. This marks the first sign of a slowdown after two years of uninterrupted growth. Rents are still rising year-on-year (+7.8% compared to H1 2025), but the pace of growth is noticeably easing. The slowdown is primarily driven by the apartment segment, where a growing volume of completed units is giving tenants more choice.
Volume of Rental Contracts: New vs. Renewed
Period | Renewal | New | Total |
|---|---|---|---|
H1 2024 | 174,000 | 100,000 | 274,100 |
H2 2024 | 185,900 | 116,900 | 302,800 |
H1 2025 | 185,600 | 100,000 | 285,600 |
H2 2025 | 203,800 | 119,700 | 323,500 |
H1 2026 | 182,000 | 95,000 | 277,000 |
The table splits the total number of registered rental contracts into two groups: renewals (an existing tenant staying in the same property) and new contracts (a new tenant signing a lease on a different or first-time property). In H1 2026, tenants renewed their existing contract in two out of three cases (65.7%), rather than moving elsewhere. Despite the slight slowdown in rental growth, the market therefore remains stable, with most tenants satisfied with their housing and having no reason to change address. The total number of contracts declined slightly by 3% year-on-year, with the decline concentrated mainly in the second quarter (-8.1%), which also corresponds to the mild moderation in rental rates mentioned above.
Gross Rental Yields: Apartments
Location | Gross Yield |
|---|---|
Dubai – apartments citywide (average) | 6.9% |
Dubai Investments Park | 9.7% |
International City | 8.9% |
International City Phase 2 | 8.4% |
Dubai Production City | 8.3% |
DAMAC Hills 2 | 8.3% |
Dubai Studio City | 8.1% |
Dubai Sports City | 8.0% |
Downtown Jebel Ali | 7.9% |
Discovery Gardens | 7.7% |
Gross rental yield indicates what percentage of a property's value the rent generates annually, before deducting costs such as service charges, maintenance, or potential vacancy periods. The formula is simple: annual rent divided by the purchase price of the property. The higher the number, the faster the rental income "pays back" the investment. The first row (6.9%) represents the citywide average, and the remaining nine locations all exceed it, offering above-average returns. Notably, these are not prestigious city-centre locations, but rather more affordable, peripheral communities. This is a typical pattern: a lower purchase price relative to a comparable rent translates into a higher percentage yield.
Gross Rental Yields: Villas and Townhouses
Location | Gross Yield |
|---|---|
Dubai – villas/townhouses citywide (average) | 5.0% |
Dubai Industrial City | 6.4% |
DAMAC Hills 2 | 5.8% |
Jumeirah Golf Estates | 5.8% |
District One MBR City | 5.6% |
Al Barari | 5.6% |
DAMAC Hills | 5.5% |
Villanova | 5.2% |
Mudon | 5.2% |
Town Square | 5.0% |
The same principle applies to the villa and townhouse segment. The average citywide yield is lower (5.0% versus 6.9% for apartments), which is a common pattern in other markets too, since villas tend to carry a higher purchase price relative to rent than apartments. Notably, DAMAC Hills 2 appears as an above-average location for both apartments (8.3%) and villas (5.8%), confirming it as a community attractive to investors across both property types.
Key Figures at a Glance
Indicator | H1 2026 | Year-on-Year Change |
|---|---|---|
Rental rate (AED/sq.ft/year) | 75.7 | +7.8% |
Gross yield – apartments (citywide) | 6.9% | – |
Gross yield – villas/townhouses (citywide) | 5.0% | – |
Number of rental contracts | 277,000 | -3% |
Share of renewed contracts | 65.7% | – |
What This Means
The H1 2026 data paints a fairly clear picture: Dubai's rental market is entering a phase of moderation following two years of exceptionally strong growth, during which annual rental increases commonly exceeded 11%. This slowdown is not incidental. It is directly linked to the growing volume of completed properties entering the market, giving tenants more choice and naturally easing the pace of rental growth, particularly for apartments.
Nevertheless, the high share of renewed rental contracts (65.7%) signals that tenants in Dubai remain loyal to their properties. This is not a market experiencing a mass exodus of tenants, but rather one gradually settling into a more sustainable pace of growth.
For investors, the key takeaway lies in the yield data: the highest gross yields are not found in glamorous central locations, but in more affordable, less prestigious communities such as Dubai Investments Park or International City. This is a logic worth remembering when selecting an investment property. The goal of maximising yield and the goal of owning a property in the most prestigious location are often two different objectives, and it is worth clarifying in advance which one takes priority for a given investment.
Considering an investment in a Dubai property with rental income in mind? We'll help you find a location that matches your yield and investment goals.
