A new report from property consultancy Cavendish Maxwell shows Dubai's rental market is cooling, with a growing share of tenants now renewing leases at lower rates than before. According to the data, 21.4 per cent of rental transactions in the third quarter of 2026 involved a rent reduction, up sharply from just 4.8 per cent in the first quarter of the year.

Over the same period, 38.7 per cent of leases were renewed at identical rates, while 40 per cent still recorded increases. Of more than 172,000 rental contracts registered in the third quarter, around 94,300 were renewals, down 10.6 per cent year-on-year, while new contracts rose 18.2 per cent to 77,700.

Average rents stood at Dh77.3 per square foot annually in September, up 5.5 per cent year-on-year, compared with 11.5 per cent growth recorded in September 2025, a clear slowdown in the pace of increases. Rental yields averaged 6.6 per cent for apartments and 4.9 per cent for villas and townhouses during the quarter.

Rising supply is seen as a key driver behind the shift. Roughly 38,000 residential units were handed over between January and September, a 41.4 per cent increase on the same period last year, with another 24,400 units expected before the end of 2026 and close to 291,800 more scheduled across 2027 and 2028. Cavendish Maxwell described the trend as reflecting diminishing landlord pricing power and greater room for tenants to negotiate, as new supply gradually catches up with demand across Dubai's residential market.