Short-term rental market in Dubai booms in 2024
Property owners in the UAE recognise the growing returns offered by short-term rentals, with properties emerging as a second major income stream for UAE residents in 2024.
Short-term rentals have fully recovered from the pandemic downturn, and savvy real estate investors are looking to capitalise on the exponential growth of this segment.
This article looks at what’s behind the growth of the short-term rental market in Dubai and looks forward to what you can expect throughout the rest of 2024.
Real estate growth in the UAE at the start of 2024
Real estate investments in the UAE are booming, with February seeing more than $10 billion in sales in just one month.
Locations like Dubai Marina, Downtown Dubai, Palm Jumeirah, and DAMAC Hills saw lots of sales at the start of 2024, which is in line with increased interest in the Emirate in the past few months.
Many existing investors and new property owners in Dubai are turning their properties into short-term rentals due to the lucrative returns offered by the market.
The demand for short-term rentals in Dubai
Though some investors like the guarantee of occupancy offered by long-term rental agreements, the increased returns offered by short-term rentals are difficult to ignore.
What’s more, the constant flow of tourists to Dubai throughout the year means that occupancy isn’t something that most property owners need to worry about.
In 2023, Dubai’s Department of Economy and Tourism statistics show that almost 18 million international overnight visitors arrived in Dubai, up nearly 20% from 2022.
This means that just short of 50,000 people were looking for somewhere to stay every night, illustrating the obvious role that high-quality, short-term rentals played in the city’s accommodation offering.
Dubai’s Remote Worker Visa
While some vacationers prefer to rent an apartment, many tourists opt to stay in any of the 200,000+ hotel rooms available in Dubai for short breaks.
However, remote workers who arrive in Dubai will always look to short-term rentals over hotel rooms, and the number of people arriving on remote worker visas is increasing annually.
Hotel rooms are prohibitively expensive for most people staying in Dubai for longer than one week. Moreover, they don’t afford visitors the luxury of preparing meals and enjoying the independence and privacy of short-term rentals.
Dubai’s pioneering “Virtual Work Residence Visa” gives anyone with a monthly income of at least USD 3,500 the opportunity to live and work in the city for up to one year.
Many of those who arrive with this permit are influencers and digital nomads, and they all require short-term rentals for the duration of their stays.
This market segment will continue to grow as many employers and employees embrace the concept of remote working. Dubai is, and will remain, one of the world’s most prominent digital nomad hotspots, which is excellent news for the short-term rental market in the city.
Regulatory success and high rental yields in Dubai
Numerous areas in Dubai offer rental yields of more than 7%, which is one of the reasons that the city attracts so many buy-to-let investors in the first place.
While many landlords begin with the intention of securing a long-term rental for their properties, the regulatory success of the short-term market in Dubai also plays into their thinking.
Dubai has created an environment that is conducive to short-term rental growth. Property owners can make their rentals unavailable at any time they wish and adjust their properties’ pricing throughout the year, reflecting the fluctuation of prices in peak and off-peak seasons.
What’s more, it’s super easy for property owners to obtain a licence from the Department of Tourism and Commerce Marketing at just AED 1,520 per year. Each landlord can get up to eight permits before having to apply as a “professional operator.”
Though a tourism tax does apply, there is no income tax on short-term rental earnings in Dubai, which is another big draw for investors.
The regulatory landscape of short-term rentals in Dubai is designed to help and support landlords, and it’s one of the main reasons for the segment’s success.
The immediate future of Dubai’s short-term rental market
The number of tourists and overnight visitors arriving in Dubai will continue to increase in 2024. Given the resurgence of Dubai’s tourism scene following the pandemic, we’re likely to see similar or even higher figures than in 2023.
Other initiatives, such as the Remote Worker Visa and even Dubai’s “Golden Visas”, will make it easier for more digital nomads and other professionals to make Dubai their permanent home for up to 12 months.
All these things will fuel the demand for high-quality short-term rentals in Dubai in what remains of 2024 and the coming years.
While hotel chains like Marriott and Hilton are entering the short-term rental market, we expect landlords in Dubai to benefit significantly from the influx of new visitors to the Emirate from 2024 onwards.
How GuestReady can help you with your short-term rental
If you want to make your property available for short-term rent in Dubai, our team will help you.
We offer exceptional service to you and your guests, ensuring that every stay is successful. We also remove much of the stress of finding tenants for your short-term rental and offer fair and transparent commission-based pricing.
Find out more or get in touch with our team for more information.
