The Dubai rental market in 2025 has changed compared to previous years. What we see today is that bed space rentals are increasing faster than other sectors.
New market reports highlight a significant Dubai rental increase, showing a 30% rise in demand for shared living options. As tenants search for cheaper and more flexible housing, this shift has intensified.
With studio prices continuing to climb and supply remaining limited, shared accommodation has become a practical and increasingly common alternative for many residents.
Bed Space Demand Soars as Tenants Seek Cheaper Options
When we examine rental platforms across Dubai, we observe that searches for bed space have increased significantly since early 2025. Bed space is the fastest-growing segment of the affordable housing market.
Today, renters are increasingly looking for shared rooms and partitioned spaces, as studio and one-bedroom rentals continue to rise. One of the reasons is the increase in remote workers in Dubai and the growing interest of digital nomads in living in Dubai, which accelerates the demand for flexible and low-commitment housing.
It is not surprising that shared housing has become an alternative option for newcomers. The demand for housing in Dubai has reached the highest level in recent years.
Al Rigga, Bur Dubai & Deira Lead the Shared Housing Market
Demand for affordable rentals has increased in Dubai’s older, well-connected neighbourhoods.
Recent Q1–Q2 2025 data shows that Al Rigga is the fastest-growing bed space rental in Dubai.
Bur Dubai also remains popular among young workers thanks to its central location and easy transportation.
Deira also continues to attract tenants seeking affordable living and a variety of shared housing options.
According to experts, these areas are generally cheaper than new areas due to their favorable walking areas and proximity to metro stations.
“Demand in Deira and Bur Dubai is increasing earlier than usual, indicating that there is a lot of pressure on low-income tenants,” noted one market researcher.
Why Bed Space Rentals Have Grown by 30% This Year
The 30% increase in bed space rentals in 2025 reflects the broader Dubai rental increase, showing that housing costs across the city have risen significantly.
Market reports show that studio rents in several central areas have increased by 12 to 22 percent annually. High-demand areas such as Dubai Marina and Business Bay are always attractive to expats.
Some buildings have also increased deposit requirements, adding to the financial pressure on tenants. It is also necessary to remind that short-term rentals during peak tourism have reduced the long-term supply of housing in Dubai.
Together, these factors make shared housing the most affordable option for many newcomers. And employers are noticing that more and more employees are turning to bed spaces to manage their limited budgets so they can live an affordable life in Dubai.
Rising Costs Drive Shift Toward Shared Accommodation
The move towards shared living is no longer limited to low-income tenants. Many middle-income professionals are also considering bed spaces as a temporary way to manage rising costs in Dubai, so that they can have permanent housing in the city in the future.
Recent UAE cost-of-living indicators point to higher food and transport prices in early 2025, as well as strong demand for lease renewals, which will reduce the number of vacant units available for rent.
The competition of remote workers and digital freelancers who have migrated to Dubai to do short-term projects adds more pressure to the lack of housing in Dubai.
From the point of view of tenants, bed spaces help to reduce monthly expenses by 40-60% compared to studios.
As one Bur Dubai building manager explained, “Many tenants choose shared units to manage rising rents until the market stabilizes.”
What’s Next for Dubai’s Affordable Housing Market?
Analysts expect the increase in demand for shared accommodation to continue until the second half of 2025, as new expatriates arrive in Dubai and seasonal employment cycles in the second half of 2025 also contribute to the rise in demand for shared accommodation.
However, several factors continue to shape the Dubai rental market amid the ongoing Dubai rental increase.
Key questions remain: Will future housing supply ease pressure on mid-range units? How will tourism patterns shift between winter 2025 and early 2026? What legal changes might affect shared housing? And how much additional workforce accommodation will employers require?
Currently, shared units are a favorable option for tenants who are facing rising rents in Dubai.
But experts note that affordability concerns may persist unless rent growth slows or more competitively priced units become available to expats in Dubai.
Conclusion
Overall, Dubai’s rental outlook in 2025 shows a clear push towards affordability, driving more residents towards shared housing. With the ongoing Dubai rental increase, limited supply, and continued demand from new workers and digital nomads, bed spaces are likely to remain a key segment of the market.
Analysts say that a significant drop in rents in Dubai depends on the supply of new housing and slower price growth in the coming months.
