Dubai’s property market is struggling to meet the growing demand for luxury apartments, as highlighted by real estate experts. This shortage has caused rental prices for such apartments to rise significantly.
“We currently have very few ready luxury apartment projects,” said Vladimir Minaev, a luxury property specialist at Metropolitan Premium Properties. “Only about four or five truly high-end options are available. High-net-worth individuals (HNWIs) often choose to rent while exploring the emirate for the best location. Since these properties are scarce, rental rates are exceptionally high.”
Record-Breaking Rental Deals
A prime example of this trend is a European HNW family’s rental of a 10,000 sq ft penthouse at The Royal Atlantis Resort and Residences on Palm Jumeirah.
They paid a record-breaking Dh4.4 million, marking the largest single-unit rental deal in Dubai’s history. The fully furnished penthouse features four bedrooms, a library, and an exercise room. Its appeal lies in its high-end amenities, hotel concierge services, and move-in readiness.
Changing Definition of Luxury
The concept of luxury is evolving, noted Rohit Bachani, co-founder of Merlin Real Estate. “Luxury now goes beyond traditional definitions of opulence. It’s about lifestyle, connections, top-tier amenities, and a strong identity. The influx of HNWIs into Dubai is transforming the market,” he said.
Supply Struggling to Keep Up
Jeff Raju Kuruvilla, CEO of Manifest Real Estate, pointed out that the supply of luxury apartments hasn’t kept pace with the growing demand.
“HNWI migration to Dubai has increased demand for luxury apartments. However, the availability of properties with unique architecture and premium amenities in prime locations remains limited. Although top developers launched exceptional projects in 2024, they couldn’t meet the soaring demand,” he explained.
Jeff added that off-plan luxury properties are sold out within hours of launch and are being resold in the secondary market at premium prices.
Why Are Luxury Rentals So Scarce?
Vladimir Minaev mentioned that luxury properties are rarely available for rent. “Most people prefer to buy and sell luxury properties rather than rent them. While villas are easier to find, penthouses have extremely limited availability,” she said.
High Returns Attract Investors
Jeff highlighted the strong returns in this market segment. “Luxury properties in Dubai still offer rental yields of 5–7%, drawing new investors to areas like Palm Jumeirah, Downtown Dubai, and Business Bay,” he said.
He also emphasized the rising popularity of branded residences, which are among the most in-demand categories in Dubai’s luxury property market.
