JobXDubai

Dubai’s tourism sector is driving a surge in demand for short-term rental properties, prompting a wave of conversions by landlords and investors seeking to capitalize on the lucrative market, experts reveal.

In 2024, Dubai has already witnessed a significant growth in volume in short-term rental accommodation available compared to 2023. Image: Shutterstock

The demand drivers are multifaceted, according to Louise Heatley, owner and Managing Director of Exclusive Links Real Estate Brokers. “Government visa initiatives are encouraging more international interest. The quality of living in Dubai has attracted a new stream of predominantly European investors who are looking to utilize their properties on a permanent or temporary basis, a convenience and flexibility only short-term letting will provide,” she added.

Higher returns on investment are pushing investors to switch their properties to short-term rentals. “While short-term leases typically generate 20-25 percent more income over a year compared to long-term rentals, based on a minimum of 80 percent occupancy, we are already seeing the annual income from short-term leases lessen due to the higher rental prices being achieved today,” said Heatley.

As the short-term rental market heats up, certain property types and locations are emerging as clear frontrunners. Properties in prime areas like Downtown Dubai and Palm Jumeirah yield significantly better ROI than long-term rentals, according to István Juhász, CEO and Co-Founder of Shard, a co-ownership platform.

Entire villas are also in high demand, particularly among larger groups and families. “Large villas, especially those with private pools and plenty of space, are favorites among families or groups traveling together. Luxurious villa communities in areas like Emirates Hills, Dubai Hills or Jumeirah appeal not only to discerning travelers but also locals seeking a lavish staycation,” said Abdullah Alajaji, Founder and CEO of Driven Properties.