Dubai's Rental Market Turns: New Leases Now Outnumber Renewals for the First Time

For 36 consecutive months, Dubai tenants mostly stayed where they were. Renewals outnumbered new leases every month from January 2023 until June 2026. In July and August that pattern broke. It is a small change in a spreadsheet and a meaningful one for anyone who owns, rents or underwrites Dubai property.

What the data shows

According to analysis of Dubai Land Department tenancy registrations by fäm Properties, reported by Khaleej Times on 23 September, new leases exceeded renewals by 633 contracts in July and by 2,139 in August. This was the first time new contracts outnumbered renewals in any month since the dataset began in January 2023. New leases ran at roughly 14,100 in July and 15,600 in August, both above a year earlier, although January to August new leases overall were about 1% below 2025, and renewals were also about 1% lower.

The volume of activity remains high. A separate market update from Edwards & Towers, published on 9 October, reports 298,984 freehold rental contracts in the first nine months of 2026, up 6.8% year on year, with September's 48,639 contracts the highest monthly total of the year. Both sources are secondary analyses of DLD data and should be verified against primary records before being relied on.

Why tenants are moving

The reason is price. The same analysis found that new tenants could secure comparable apartments, in the same building and unit type, at rents up to 15.3% below January 2026 levels, while renewal rents fell only about 1%. The median new-lease apartment rent was reported at AED 94.6 per sq ft in August, down 8.3% from the October 2025 peak of AED 103.1.

In other words, there is now a gap between what a landlord can ask a sitting tenant and what the market will charge a newcomer, and the gap runs in the tenant's favour. fäm's CEO summarised it as tenants being able to move to a comparable apartment for less than a renewal would cost. Where that holds, moving house is a rational financial decision rather than an inconvenience.

Where supply is doing the work

Supply is the most plausible driver. Dubai's ready-home handovers have been running at elevated levels this year, a theme we covered in earlier research, and new stock competes directly with existing landlords for tenants. The shift was visible in specific districts: in August, new leases outnumbered renewals by 1,102 in Al Barsha South Fourth, an area that includes Jumeirah Village Circle.

It is worth being careful about what the data does not say. It does not show rents collapsing; renewals, which still account for a large share of contracts, have barely moved. Nor does it show every district behaving alike. The 15.3% figure is a maximum for some mid-market and prime districts, not a market average.

Regulation is also changing the supply picture

A separate policy development bears on the lower end of the rental market. Dubai Municipality published its Planning and Building Requirements Guide for Shared Housing on 7 October, implementing Law No. 4 of 2026, which took effect on 8 September. Bedrooms must provide at least five square metres per person, buildings must be designated for either individuals or families, and owners have one year to bring existing buildings into compliance. More than 44 areas are permitted, with further locations to be announced. How this reshapes demand for conventional apartments will take time to show in the data.

What it means for owners and investors

For landlords, the practical lesson is that the renewal letter is no longer a safe default. A landlord pricing a renewal against last year's rent may find the tenant comparing it with an available unit nearby at a lower figure. Pricing at or near current new-lease comparables, and keeping a good tenant, may be worth more than holding out for a headline rent and facing a vacancy.

For investors, gross yield assumptions built on 2025 rents deserve a refresh. Yield is now a larger part of the return than price growth, so the rent line in a model should be tested against the latest registered contracts, not asking prices. For tenants, the window to negotiate or relocate is open, particularly in areas with heavy new supply.

For buyers weighing a first purchase, lower rents also change the rent-or-buy arithmetic in the short term, which makes the quality of the property and the purchase price more important, not less.

A G H Properties tracks Dubai Land Department tenancy and sales registrations at community level. If you own a rental unit and want a renewal strategy based on registered comparables, or you are testing an investment against current rents, contact our team for a private consultation.