More UAE residents are opting for monthly rentals. Here's why

As geopolitical tensions escalate, a growing number of residents in the United Arab Emirates are opting for monthly rental agreements, shifting away from traditional long-term contracts. The demand for these short-term rental units has surged due to uncertainty driven by the ongoing war. Alec Smith, head of sales and leasing at Savills Middle East, explained that the war led to a sharp decline in tourism, forcing short-term rental operators to cancel or postpone bookings.

However, the market quickly adapted, with residents and new arrivals seeking monthly accommodations instead of tenants committing to annual tenancies.

First Class Property Management, which manages over 600 homes in Dubai, Abu Dhabi, and Ras Al Khaimah, now caters to monthly stays for UAE residents. Luis Santos, the company's co-founder and managing director, reported that more than 90% of its units are rented out on a monthly basis. The average stay duration has increased from 11 days to 21 days, reflecting the change in tenant profiles.

Properties rented on a monthly basis typically command a premium compared to annual tenancies, with rates varying based on factors such as location, property quality, age, furnishings, and amenities. For instance, studio apartments range between Dh4,000 and Dh8,000 per month, while one-bedroom apartments can cost between Dh5,000 and Dh12,000.

Arooba Noor, a businesswoman who relocated to Dubai from Riyadh three months ago, pays Dh16,000 per month for a two-bedroom apartment in Downtown Dubai. She continues with the arrangement primarily due to the flexibility it offers. "We want to see: do we want a house in the future, an apartment? Which area do we want to move into? So we're working out what's best for us, and then in this time, this [rental] gives us the flexibility to pay on a monthly basis and not be tied into a contract."

Dubai's Dubai Land Department introduced the Flexi Rent scheme in June, partnering with 12 property companies to help tenants pay rent in monthly instalments, easing their financial burden during uncertain times.