Dubai Launches Flexi Rent Scheme to Bridge Gap Between Short-Term and Annual Rentals

Dubai’s real estate market is set to see a significant shift with the introduction of the Flexi Rent scheme, an initiative from the Dubai Land Department (DLD) designed to bridge the gap between short-term holiday home rentals and traditional annual tenancy contracts. Launched in June, the scheme allows tenants to pay rent on a monthly, quarterly, or annual basis when renting through participating real estate companies, alleviating the burden of large upfront payments typically required for annual leases.

Historically, many tenants opted for short-term rental contracts not due to a desire for lifestyle flexibility, but because they struggled to meet the traditional one- or two-cheque annual payment structures. This often meant paying a premium for monthly payments within short-term holiday home setups.

Farooq Syed, CEO of Springfield Properties, highlighted that Flexi Rent creates a crucial middle ground in the market. It empowers tenants to commit to annual contracts while enjoying the payment flexibility previously associated with short-term stays. This is expected to draw a segment of the market back to annual leases, particularly mid-income professionals and young families who previously leaned on holiday homes for payment flexibility.

Rohit Bachani, co-founder of Merlin Real Estate, emphasised that the scheme offers tenants the same monthly payment rhythm within a registered Ejari tenancy, providing the crucial protections of Smart Rental Index and Real Estate Regulatory Authority (RERA) recourse, without the added premium of short-term rentals. While transient residents, corporate assignments, and tourists will still find short-term rentals suitable, those primarily seeking payment flexibility now have a more secure and cost-effective option within the annual rental market.

The initiative comes as Dubai’s rental market shows signs of softening, with 115,992 rental transactions recorded in Q2, valuing AED 10.18 billion. Leasing volume saw a 19% quarter-on-quarter decline, with new contracts falling 15% to 42,100 and renewals dropping 20% to 73,892. Median rental pricing decreased by 7% to AED 93 per sq ft, though renewals still constitute approximately 64% of rental activity, indicating a strong tendency for existing residents to remain in their current properties.