Dubai’s rental market is entering a period of stabilisation, prompting more residents to choose short-term rentals instead of committing to traditional annual leases. Tenants are increasingly using weekly and monthly accommodation as a flexible option while waiting to see whether rental prices soften further.

Rental growth has slowed after several years of strong increases. According to CBRE, Dubai’s rental market entered its third consecutive quarter of broader stabilisation in the first quarter of 2026. This changing environment is encouraging tenants to remain flexible and search for better-value homes before signing long-term contracts.

Industry executives have reported a significant increase in longer short-term stays. At one property management company, bookings of 29 nights or more increased from around 7 per cent to 68 per cent. This indicates that short-term rentals are increasingly being used as temporary housing rather than simply accommodation for tourists.

Some tenants are also using short-term apartments as a bridge while searching for cheaper long-term options. One reported example involved a tenant who moved from a Dh170,000 annual rental commitment to another unit in the same building at Dh135,000, representing a saving of around 20 per cent.

The profile of short-term rental customers has also changed. Domestic residents are becoming a larger part of the market as tourism demand weakens. Prime locations such as Downtown Dubai and Jumeirah Beach Residence are attracting residents who can access furnished and flexible accommodation without making a long-term commitment. Meanwhile, areas such as Jumeirah Village Circle, Al Furjan and Arjan are seeing increased demand because of their supply of studios and one-bedroom apartments.

The shift highlights a broader change in tenant behaviour. Rather than locking themselves into expensive annual leases, many Dubai residents are prioritising flexibility and affordability while monitoring market conditions. If rental prices continue to moderate, short-term rentals could remain an important alternative for tenants searching for better deals in Dubai’s evolving property market.