Nearly 21.4 per cent of Dubai rental contracts renewed in the third quarter of 2026 recorded a drop in rent compared with the previous lease, up sharply from just 4.8 per cent in the first quarter, according to new data from property consultancy Cavendish Maxwell. The figures suggest negotiating power is gradually shifting from landlords to tenants after years of steep rent increases.

Over the same period, 38.7 per cent of contracts were renewed at unchanged rates while 40 per cent still recorded increases. The average rent across Dubai reached Dh77.3 per square foot annually in September, up 5.5 per cent year-on-year, though analysts note the pace of growth has slowed markedly from previous years.

Ronan Arthur, director and head of residential valuation at Cavendish Maxwell, attributed the shift mainly to a sharp rise in new housing supply. More than 38,000 residential units were delivered in Dubai between January and September, a 41.4 per cent increase on the same period last year, with a further 24,400 units expected to be handed over before year-end.

The sales market, by contrast, is cooling more noticeably. Transaction volumes fell 38.6 per cent year-on-year, and prices posted their first annual decline since the post-pandemic recovery. Rental yields remain relatively steady, with apartments returning 6.6 per cent and villas and townhouses 4.9 per cent, as tenants increasingly benefit from a wave of new supply entering the market.