Dubai’s luxury villa rental market has witnessed significant growth during the first five months of 2026, driven by increasing demand for premium and ultra-luxury properties and a notable shift toward higher rental price brackets.

According to a market analysis released by fäm Properties, the annualised value of new villa tenancy contracts exceeding AED1 million rose by 27 per cent year-on-year, reaching AED509 million between January and May 2026, compared to AED400 million during the same period last year.

The report also revealed that the annualised value of renewed villa tenancy contracts above AED1 million increased by 28 per cent to AED114 million, up from AED89 million in 2025.

Growing Demand for Ultra-Luxury Rentals

Data from DXBinteract showed that while overall transaction volumes remained relatively stable, rental values increased as more tenants entered higher-end price segments.

The AED2 million to AED3 million annual rental category recorded particularly strong growth, with new contracts increasing by 21 per cent and renewals rising by 17 per cent.

At the ultra-luxury end of the market, nine new tenancy agreements were signed in the AED5 million to AED10 million range, while seven new contracts exceeded AED10 million annually.

The report also noted that long-term leasing remains the preferred choice among luxury tenants, with 67.3 per cent of all contracts signed between January and May covering a 12-month period.

Palm Jumeirah Leads Luxury Rental Market

Palm Jumeirah continued to dominate Dubai’s luxury villa rental landscape, recording the highest number of both new and renewed tenancy contracts valued above AED1 million.

The annualised value of new rental agreements in Palm Jumeirah reached AED113 million during the first five months of 2026, representing a 14 per cent increase from AED99 million recorded during the same period in 2025.

Meanwhile, the value of renewed contracts in the community climbed 15 per cent to AED37 million, compared with AED32 million a year earlier.

Dubai Hills Estate Records Strongest Growth

The strongest growth in new luxury rental values was reported in Dubai Hills Estate, where annualised rental value increased by 37 per cent to AED87 million, up from AED63 million in 2025.

Palm Jumeirah recorded the highest volume of new villa rental contracts above AED1 million with 36 transactions, closely followed by Dubai Hills Estate with 35 transactions and District One Mohammed Bin Rashid City with 22.

Palm Jumeirah also led the market for renewals, recording 16 tenancy renewals above AED1 million during the period.

Market Confidence Remains Strong

Commenting on the findings, Firas Al Msaddi, Chief Executive Officer of fäm Properties, said:

“Demand at the luxury and ultra-luxury end of the rental market has remained resilient over the last few months. Tenants at this level are not only choosing Dubai, they are prepared to pay significantly more to live here, and that sends a clear signal about the sustained confidence in this market.”

The report further highlighted that new agreements accounted for the majority of luxury rental activity, representing 69 per cent of contracts in Palm Jumeirah, 85 per cent in Dubai Hills Estate, and 63 per cent in District One Mohammed Bin Rashid City.

The latest figures reinforce Dubai’s position as a leading destination for high-net-worth individuals and global investors seeking premium residential properties, supported by strong demand, limited supply in prime communities, and continued confidence in the emirate’s luxury real estate sector.