With a 30% rise in demand over this time last year, short-term rentals in Dubai are changing the rental landscape.
According to industry experts, the trend is completely changing the real estate market in the area, providing astute property owners with exceptional returns and appealing lodging options for tourists.
“Over the past year, we have seen short-term rentals in Dubai surge, with a 30% increase in bookings due to rising tourism and a demand for flexible living options,” explains Myles Rothwell, Managing Director at Edwards and Towers, a leading real estate brokerage and surveying practice in Dubai.
Investor returns up
“This has led to investor returns up to 20% higher than traditional leases. In comparison, long-term rentals offer steady income, maintaining an average annual yield of 7%.”
“When searching for an ideal short-term rental, thorough research is crucial,” says Cherif Sleiman, Chief Revenue Officer at Property Finder, a pioneering regional property portal. “Our recent white paper, titled Opening Doors: Insights, Trends, and Forecasts for Real Estate in the UAE, reveals that most short-term renters with families for example, prefer lifestyle-oriented communities with vibrant assets and good connectivity.
“While consumers seek unique experiences curated by diverse hosts, for investors, this is an opportunity to select properties that promise the best returns. Indeed, the growth of short-term rentals is a thrilling development within the real estate sector, and we look forward to its continued success,” he adds.
In addition to the rise in demand, some neighborhoods are becoming more well-known for the short-term rental choices they provide. According to Anthony Joseph Abou Jaoude, the founder and CEO of Primestay, one of the top vacation rental companies in Dubai, popular neighborhoods include Business Bay, Arjan, Downtown Dubai, Palm Jumeirah, and DAMAC Hills. These dynamic locations provide a unique blend of contemporary communities, first-rate amenities, and easy access to the city’s attractions.
Luxury travel destination
“In recent years, Dubai has become a luxury travel destination, with visitors willing to pay more for high-end accommodations. A significant trend is that families and groups prefer larger holiday homes over multiple hotel rooms, driving up the demand for vacation villas and spacious apartments for short-term rentals. In early 2023 up to date 2024, Dubai’s rising demand for short-term rentals presents landlords with lucrative opportunities for high occupancy rates and attractive rental yields. Dubai’s vibrant tourism scene ensures strong demand for short-term rentals, offering landlords and investors a steady and profitable income stream,” Abou Jaoude adds.
The city prepares for a spike in visitors with a wide range of interests and preferences as winter draws near. Investors hoping to maximize the value of a property in this market segment must stay abreast of these needs.
“Dubai’s short-term rental market is experiencing rapid growth, with new operators entering the scene. However, the market remains fragmented, with the top five companies making up less than 10% of the offerings. Over the next one-two years, I anticipate a wave of consolidation, with some operators scaling up to manage 100+ units, while others may exit the market. We can also expect tighter government regulations to ensure compliance with licensing and guidelines.
“Additionally, technological advancements like AI-driven tools and smart home features will enhance both guest experiences and operational efficiency. Finally, as remote work becomes more prevalent, we foresee a growing demand from digital nomads seeking flexible, short-term accommodations,” says Nina Klishevich, General Manager, Blueground, operator of the largest, curated network of furnished rentals globally.
Well suited
Offerings for short-term rentals must be well-suited to consumer and regulatory requirements, with a focus on strong potential returns. When serving the market, investors should keep the following in mind:
*Regulatory Clarity and Compliance: Ensure one has clarity around all the regulatory processes involved, with a focus on health and safety, quality protocols, and consumer protection measures.
*Technology integration: Find new ways to make one’s living space hyper-convenient and connected for one’s potential tenant by deploying smart home devices that can enhance guest experiences and help hosts optimize their operations.
*Sustainability Initiatives: Promoting eco-friendly practices within the short-term rental sector, such as using energy-efficient appliances and sustainable building materials, aligns with broader environmental goals and attracts eco-conscious travelers.
*Trusted platforms: Use trusted property search platforms, such as Property Finder to showcase one’s short-term rental to a global audience. Property Finder also offers advanced services, such as Data Guru, offering in-depth insights into community trends, neighborhood specifics, and pricing, helping one make informed investment decisions.
There is something for everyone in the short-term rental market, regardless of whether they are travelers or investors looking for a place to stay in Dubai. Visit Property Finder to find the best short-term rentals, and use Data Guru to stay up to date on the most recent community insights. Get the Property Finder app from the Apple Store or Google Play to enjoy a seamless mobile search.
