Dubai: New Property Owners Opt for Short-Term Rentals

dubai properties

Surge in Airbnb Listings in Dubai

Dubai has seen a large upsurge in Airbnb listings over the last three years. There are currently between 25,000–30,000 listings in the city, with significant growth in 2024 compared to the previous year. This boom looks set to continue over the coming years, providing a great opportunity for investors, but there are certain considerations to make before you dive in.

Legal Framework and Regulation

Since a legal framework was introduced in the region and short-term lets have been fully regulated since 2016, the Airbnb market has emerged as a lucrative alternative income source for UAE nationals and expat property owners.

Trend of Property Owners Entering the Market

We have seen a trend of property owners entering the Dubai real estate market for the first time and immediately converting their units to short-term rentals. We are also seeing some of our clients sell off their assets to new buyers in the market who then continue short-letting their new properties with us.

Short-Term Rentals as a Key Selling Point

The potential of short-term rentals has become a key selling point of many properties and is increasingly involved in conversations between buyers and real estate agents.

Advantages of Short-Term Rentals

Short-term lets give owners complete freedom over their assets. It’s a dynamic business that ensures landlords don’t get tied into long rental contracts and can adapt their strategy to suit their needs at any given time. The short-term rental market provides on average 20 per cent higher returns than long-term – over a two to five-year basis.

Record-Breaking Tourism and Its Impact

There is no doubt that the opportunity in Dubai is huge right now. 2023 was a record-breaking year for tourism with the number of international tourists growing by 19% YoY. This year has also got off to an extremely promising start. According to a recent report by the Dubai Department of Economy and Tourism (DET), the city welcomed more than 5 million overnight visitors from January to March 2024, an increase of 11% on the same period in 2023. Dubai also recently announced that it will create a new passenger terminal at Dubai World Central (DWC) which will bring investment and more tourists into the area.

Considerations for Investors

However, it is important for investors to know the market very well before they enter it. For example, areas such as Dubai Marina, Jumeirah Beach Residence, Palm Jumeirah and Downtown provide the highest rate per night, but because the property values are also high, they don’t always make the best returns. Some of the highest returns on investment currently are also in areas like Jumeirah Lake Towers (JLT) and Jumeirah Village Circle (JVC). Those great deals are harder to come by now (as prices have risen), but they are still there for those willing to make the effort.

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