Dubai’s new Flexi Rent scheme to narrow short-term, annual lease gap

Dubai’s new Flexi Rent initiative is expected to significantly narrow the long-standing gap between short-term holiday-home rentals and traditional annual tenancy contracts.

According to senior real estate executives, the Flexi Rent scheme addresses what has long been the real barrier for many tenants: the size of the upfront cheque rather than affordability itself.

In June, the Dubai Land Department (DLD) launched Flexi Rent to allow tenants renting through participating real estate companies to choose monthly, quarterly or annual payment plans, helping to ease upfront financial commitments. It is expected that the scheme, announced earlier this year, will be rolled out soon.

Farooq Syed, CEO of Springfield Properties, said the initiative would create a strong middle ground in the market.

Many tenants have historically opted for short-term contracts not because they wanted flexibility of lifestyle, but because they struggled to pay the traditional one- or two-cheque annual payment structure, and were willing to absorb a premium in exchange for more manageable monthly payments.

“There is a big number of people that have decided to live for a year, but they just move into short-term rental contracts because they cannot pay the bigger cheques. Those people will now prefer committing to the annual contract, but then having the payment flexibility,” Syed said, adding that short-term rentals would continue to serve international tourists and those unwilling to commit for a full year.

Dubai’s rental market is softening amid growing supply. The emirate recorded 115,992 rental transactions worth Dh10.18 billion during Q2. Leasing volume declined 19 per cent quarter-on-quarter, while total rental value fell 18 per cent. New contracts declined 15 per cent to 42,100, while renewals fell 20 per cent to 73,892.

Median rental pricing declined 7 per cent to Dh93 per ft2. Renewals still represented approximately 64 per cent of rental activity, indicating that most recorded transactions continued to come from existing residents remaining in their current properties.

Rohit Bachani, co-founder of Merlin Real Estate, was more emphatic, describing the narrowing of the gap as “the most underestimated consequence of the initiative.”

He said a large share of monthly holiday-home tenants were never seeking lifestyle flexibility but payment flexibility, and had been paying a meaningful premium over the annual equivalent to get it.

Flexi Rent, he said, now offers tenants the same monthly payment rhythm within a registered Ejari tenancy, backed by Smart Rental Index protection and Real Estate Regulatory Authority (Rera) recourse, without the added premium.

Bachani said he expected the annual rental market to reclaim demand that had drifted towards short-term stays over the past three years, particularly among mid-income professionals and young families.

He noted that short-term rentals would remain the right fit for genuinely transient residents, corporate assignments, and tourists, but tenants who had previously chosen monthly stays simply because they could not front a large cheque now have a better housing option available to them. 

Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.