Dubai’s new Flexi Rent scheme, backed by the Dubai Land Department, will allow eligible tenants to spread rental payments into monthly instalments, helping reduce the upfront financial burden of annual leases.
Dubai’s new Flexi Rent initiative is expected to narrow the long-standing gap between short-term holiday-home rentals and traditional annual tenancy contracts. The scheme addresses a key challenge for many tenants: the size of the upfront payment rather than the overall affordability of rent.
Launched by the Dubai Land Department (DLD) in June, Flexi Rent allows tenants renting through participating real estate companies to choose monthly, quarterly or annual payment plans, helping ease the financial burden of large upfront payments.
The initiative could encourage tenants who previously opted for short-term rentals simply because they could not afford large annual cheques to return to longer-term contracts while retaining the flexibility of monthly payments.
Farooq Syed, CEO of Springfield Properties, said the initiative could create a strong middle ground in Dubai’s rental market.
Many tenants have historically chosen short-term contracts not because they needed lifestyle flexibility, but because they struggled with the traditional one- or two-cheque payment structure for annual leases. For these tenants, paying a premium for a short-term rental offered a more manageable way to spread their housing costs.
“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.
He added that short-term rentals would continue to cater to international tourists and residents who do not want to commit to a full-year tenancy.
‘Underestimated’ impact
Dubai’s rental market is showing signs of softening amid rising supply. The emirate recorded 115,992 rental transactions worth Dh10.18 billion in the second quarter. Leasing volumes fell 19 per cent quarter-on-quarter, while the total value of rental transactions declined 18 per cent. New contracts dropped 15 per cent to 42,100, while renewals fell 20 per cent to 73,892.
Median rents declined 7 per cent to Dh93 per square foot. Renewals continued to account for around 64 per cent of rental activity, indicating that most recorded transactions involved existing residents staying in their current homes.
Rohit Bachani, co-founder of Merlin Real Estate, was more emphatic, describing the narrowing gap between short-term and annual rentals as “the most underestimated consequence of the initiative.”
He said a significant share of monthly holiday-home tenants were not seeking lifestyle flexibility but rather payment flexibility, and had been paying a considerable premium over annual rents to access it.
Bachani said Flexi Rent now gives tenants the option to make monthly payments through a registered Ejari tenancy, while also benefiting from Smart Rental Index protection and recourse through the Real Estate Regulatory Authority (Rera), without paying the additional premium associated with short-term rentals.
He expects the initiative to help the annual rental market win back some of the demand that has shifted towards short-term stays over the past three years, particularly among mid-income professionals and young families.
Short-term rentals, he noted, will continue to suit genuinely transient residents, corporate tenants on temporary assignments and tourists. However, tenants who previously opted for monthly stays simply because they could not afford a large upfront cheque now have a more flexible long-term housing option.
