According to market sources, property investors and landlords in Dubai who had relied on short-term rentals were richly rewarded throughout December, with year-over-year rate increases even reaching highs of 50%.
The majority of these reservations are for a full week, and the average daily rental price of an apartment ranges from Dh1,500 to Dh2,500, depending on factors like location and demand. Much of the current rate surge is occurring further up the luxury chain, where there is a demand to lease an entire villa.
And the best part? Those rate increases might experience yet another surge as some last-minute reservations are still anticipated from this point until the first weekend of January 2024. Throughout the entire month of December, reservations for short-term accommodations in Dubai have been made, particularly for luxury properties.
Listings on the Palm are indicating daily rates of Dh4,500 and above, while upscale Downtown two-bedroom options are getting closer to Dh2,500.
According to sources, this contrasts with how demand had historically been in the first part of December in previous years.
“(Early) December is normally slower as tourists don’t travel in the weeks leading up to New Year’s Eve,” said Gregory Lewis, founder and Director at Dubai-based holiday home operator AirDXB. “And (many) expats return to their home countries to spend the festive season with family.
“We tend to see rates fall around 20 percent during this period – this isn’t exclusive to short-let. This impacts the tourism sector as a whole in general.”
But this December, things sure have turned out differently. “Early December this year went against the grain and we saw rates increase up to 50% higher than the same period in previous years,” said Lewis. “The influx of visitors for COP28 (was the reason) – and which was fantastic.”
Immediate placing in Dubai’s rental pool
Real estate investors were determined not to pass up this enormous opportunity. Many of them started adding their recently acquired properties to Dubai’s short-term rental inventory in October. “Everyone knew that demand during COP28 would be big – but the eventual bookings and the rates generated were unprecedented,” said a property owner who had 5 apartments up for these leases, with 3 of them being brand new.
“Catch the December rush was what property owners wanted. And next year, they can decide whether to switch to annual rentals. But for now, everyone is thinking short-stay rentals.”
Step forward Dubai Creek Harbour
Regarding short-term options in the city, The Palm, Dubai Marina, Downtown, and Business Bay will always be popular choices, but Dubai Creek Harbour is becoming a serious contender on its own.
“We see a lot of inquiries about Dubai Creek in particular as it’s home to new and modern complexes which sell well on listing platforms,” said Lewis. “The location is close to the airport and Downtown Dubai, which is great for business travelers.
“It also a good location for new residents getting settled in Dubai while they figure out where they want to make their permanent location. It’s more budget-friendly than other expat-dense areas. You wouldn’t see many holidaymakers here – so it is a specific market, but it works.”