Did you know? Dubai has been named as one of the world’s “top five most visited cities” success of its short term rentals market. Yes, you heard that right! But what exactly is the reason behind this trend? Nowadays business and leisure travelers of all types—single adults, couples, and families alike avoid staying in hotels and other communal lodgings and are in favor of more private, homelike settings where they can prepare their own meals and maintain their own social circles while still enjoying the perks of a vacation.
Short term rentals have helped propel Dubai after the United Arab Emirates modified its stance on masks, many individuals consisting of both investors and travelers have turned to the Dubai metropolitan area as a potential vacation destination or permanent residency. A combination of factors, including Dubai’s status as one of the world’s top five tourist destinations and the rise of flexible work arrangements, ensures that the short-term rental market in the emirate will continue to thrive.
Popularity of Short Term Rentals- COVID-19, EXPO 2020 & FIFA World Cup 2022
Experts have assessed that there is a high demand for vacation short term rentals in the United Arab Emirates due to people’s eagerness to resume regular living after Covid-19, the industry is bouncing back strongly after the recent pandemic lockdowns, hence the expansion of Dubai’s short term rentals sector is accelerating.
Expo 2020 Dubai, which lasted from October 1, 2021, to March 31, 2022, was another major factor in the growth of the emirate’s short term rentals sector. Visitors from other countries were given the option to forego long-term leases so that they could maintain their freedom of mobility and reduce their financial outlays while visiting the expo.
Another factor is the hosting of the FIFA World Cup 2022, the emirate of Dubai has become a top choice for travelers planning to attend or to stay in the area for the duration of the tournament. Additionally, the situation in Dubai is much improved by the rapid and simple access to Qatar along with the fact that short term rentals in Qatar have jumped by 30% compared to a year ago, making it the best way to rent property in Dubai.
10,000+ Active Short Term Rentals in Dubai
There are now 10,000 active vacation rentals in Dubai. In the year between December 2020 and December 2021, the occupancy rates have increased by 32%. The average cost of a day stays has climbed by 15-28%, while the cost of a month’s stay has increased by 94%. The real estate market in the emirate of Dubai has seen a record amount of transactions over AED 100M (USD 27.22M).
The Consequences of Pandemic on Short Term Rentals in Dubai
Even though the pandemic has had a noticeable effect on the real estate and hospitality sector, a growing number of people within the United Arab Emirates have been booking short term rentals in Dubai including Abu-Dhabi, Fujairah, and Ras Al-Khaimah as lodging in short term rentals is usually less expensive than staying in a hotel.
Long term rentals or hotel stays on per day charges would definitely cost far more to stay in a hotel’s one-bedroom suite than in a one-bedroom apartment, and you could acquire a three- or four-bedroom apartment for the same amount as a luxury hotel room. A shift in the real estate market, along with a general reluctance among homeowners to make long-term commitments, has resulted in an upsurge in the number of inquiries from prospective landlords about the short-term renting model.
Overseas Citizens – The Primary Visitors Surpassing Both Vacationers and Business men
The number of short term apartment stays catering to vacationers has increased during the past year. In comparison to business travelers, vacationers have been booking more in the past year. As a result of the pandemic, local expats are having a hard time making ends meet, and many of them are showing interest in short term vacation rental to buy themselves some time as they figure out what to do about their jobs and where to live in the city.
Dubai’s Most Demanded Sector – Short Term Rentals Industry
Short term rentals are common in a number of Dubai neighborhoods that cater to different types of visitors. Tourists and locals both go to Dubai’s most popular destinations: Marina, Bluewaters, Jumeirah Beach Residence, and Palm Jumeirah, etc. Corporate executive guests favor Downtown, Business Bay, DIFC, and City Walk due to their proximity to the DWTC, where many conferences and trade shows take place.
In addition, gated villa communities outside of the city center, such as Emirates Living, Arabian Ranches, Victory Heights, Jumeirah Golf Estates, and Al Barari, are becoming extremely prevalent, especially among visitors who value tranquility and privacy. In Dubai, vacationers may choose from a variety of activities and experiences, which makes it ideal for everyone, from avid golfers to beach lovers.
Dubai’s Rental Market is Focusing More on High-End Villas
Since many vacationers are traveling with children, and all want to make sure their stay is as secure and private as possible, more upscale villas have been available for holiday homes rental along with many other benefits of having a vacation rental business. People are looking for places to retreat to in the wake of a pandemic, with amenities like a private garden, beach, and pool.
For instance, a magnificent 7-bedroom villa in Emirates Hills went from renting for AED 875,000 per year to AED 1,130,000 per year in just a few months’ time. Therefore, in the current unstable market, owners of luxury villas prefer to lease their property on a short term rentals basis while keeping a close eye on projected annual rates in order to evaluate the possibility of renting annually in the near future, while still receiving a decent income in the interim. Guests wishing to stay in luxury villas for shorter stays are willing to pay a higher price for the greatest amenities and services that are available.
Short Term Rentals – Highly Popular Among Investors
Historically, the annual tenancy contract was the most popular choice for the many Dubai residents who bought the property only for investment purposes. Still, as a result of the pandemic, annual rental costs have decreased. The rental market in Dubai has been steadily declining in favor of tenants over the past year, with the average price of a rental property dropping by 9.75% between 2018 and 2019.
Shift to Short Term Rentals Before its Too Late
The most experienced investors are shifting their focus to the short term rentals model while rents remain low because they perceive the greater potential for profit and because it allows them time to consider what, if any, long-term intentions they may have for the property. The landlord retains the right to revert to a standard, indefinite lease at any moment. Therefore, owners have the opportunity to recuperate this revenue shortfall between the market rate and the annual leasing rate through the short-term rental model. So what are you waiting for? Shift to short term rentals and gain maximum advantages along with achieving your financial goals