Dubai: According to industry sources, when a European city restricts Airbnb listings, investments in Dubai’s short-stay rental market immediately increase.
“The Dubai property market saw that happen when Greece put limits on short-stay listings last year, and whereby global investors looked to Dubai to place their funds in real estate,” said Vinayak Mahtani, CEO of bnbme, a property management consultancy focusing on holiday homes.
“You feel the same thing will happen with Spain being the latest to set restrictions on Airbnb listings.
“The Dubai short stay rental market can easily absorb more investments into the category. Investors-landlords see the solid yields the rental market in Dubai is generating and that’s all they need to make up their minds.”
Some famous European holiday locations have now expressed worries about ‘over-tourism’ and how short-term rentals are causing continuous rises in the overall rental market. This is why there are restrictions on Airbnb listings.
Spain, Greece set limits
This week, Spain ordered Airbnb to reduce its listings in the country by over 66,000 houses, citing concerns about “over-tourism” and rental hikes in the local market. In Greece, new limitations went into place earlier this year, including prohibiting new short-term rental ads in some neighborhoods of Athens, among other things.
In Dubai, short-stay listings number around 30,000-40,000 properties. “But they are nowhere near the 130,000 hotel rooms and hotel apartments in the city,” said Mahtani. “There are also strict rules set by Dubai Department of Economy and Tourism on upkeep of properties meant for short-stay rentals, how they should be rented out, and what the companies engaged in this business need to follow.
“Most important, all the way back in early 2000, the authorities made it clear that developers could not interfere in allowing properties in their buildings to be rented out for short-stays. Unless there are clear provisions in the SPA (sales and purchase agreement).
“This meant a rules-based industry could grow unimpeded through the years. That’s exactly the foundation property investors need.”
In recent months, some property investors have transferred their apartments from short-term rentals to the one-year rental market, which in Dubai continues to see 5%-15% average renewal hikes. Even so, more investors and landlords are entering the short-term rental market, and the pace may pick up in the weeks following the summer.
“Airbnb is continuing to grow as Dubai remains a big travel destination – and yes we are seeing a growth due to the clamp down (other markets,” said Anna Skigin, co-founder of the property firm Frank Porter, who puts the number of short-stay rental listings in Dubai at over 30,000 units.
Dubai will continue to see additional apartment structures completed in 2025 and subsequent years, feeding the rental market. Both the one-year lease space and the short-term stays.
Sabine El Najjar, Chief Commercial Officer and General Manager of Silkhaus, believes that the laws for regulating the short-term rental sector are already in place and effective.
“The UAE has long taken a proactive and collaborative approach to regulating the short-term rental (STR) market,” said Sabine.
“By working closely with the private sector, authorities have ensured that investors can tap into this opportunity with clarity and confidence, while prioritizing guest safety and resident well-being.
“As such, we don’t foresee any disruption or risk to our operations.”
And if an investor was planning to buy a property in Spain or Greece to rent out on Airbnb, he could change his mind and invest in Dubai instead.
“That’s exactly what’s happening,” said Mahtani. “The Dubai short-term property market can easily absorb more…”
