Data shows sharp rise in Dubai rental defaults

• Rental defaults more than double
• Job cuts put pressure on households
• Increased cashflow stress for landlords

Dubai rental defaults more than doubled last year as higher living costs and white-collar job cuts squeeze households, according to proprietary data from a real estate platform.

The jump is adding friction to the city’s rental market, forcing landlords to spend more time and money chasing arrears and increasing the risk of cashflow stress for smaller investors.

“It’s not panic yet, but the effect of it, especially on the individual landlord, can be incredibly exponential,” Rakesh Mavath, founder and CEO of Takeem, told AGBI.

By comparison, the number of defaults in 2025 was about a quarter of what it was during the Covid-19 pandemic and a third of what it was in the global financial crisis, Mavath said. 

“It’s adding systematic risk to the whole system. All it would take is one black swan event or large macroeconomic event to see numbers back to those levels very quickly.” 

Digital platform Takeem offers investors payment tracking, maintenance cover and rent protection, and monitors more than 90,000 residential units in Dubai owned by private landlords, family offices and institutions – representing about $2.5 billion (AED9 billion) in annual rent.

The company said defaults rose 125 percent in the last 12 months versus the same period a year earlier but it did not disclose exact figures, citing confidentiality constraints.

Late payments rose 300 percent compared with the previous year, the data showed. Defaults are recorded once a notarised legal notice is sent 30 days after non-payment.

Most late payments reflect short-term liquidity issues such as job transitions or redundancies, rather than outright insolvency, Mavath said.

“Affordability is now a clear constraint for many tenants, especially in segments exposed to layoffs or pay cuts,” he said. “When we ask tenants why they are defaulting, they say it’s because they got made redundant.”

A delayed or late payment refers to rent not paid on time but not yet escalated. Not all payment delays turn into defaults.

Evictions for non-payment were among the most common cases handled by the state’s Dubai’s Rental Disputes Center, senior first instance judge Yousef Al Mansoori told local daily Khaleej Times last year.

The centre resolved 443 rental disputes worth more than AED190 million in the second quarter of 2025.

Earlier this month, Dubai launched a new initiative allocating AED10 million to help families struggling with rental obligations. The rent relief programme, run with the Mohammed bin Rashid Al Maktoum Charitable Establishment as part of the UAE’s Year of the Family 2026, aims to help defaulting tenants, settle enforcement cases and support additional eligible families.

Rent is the largest household expense in Dubai, typically accounting for up to 40 percent of residents’ incomes with the majority still paid in quarterly post-dated cheques.

Layoffs are affecting all income levels but have hit middle-income expatriate positions hardest, as global job cuts in technology and energy companies ripple into the region, Mavath said.

Takeem’s data shows payment stress is highest among white-collar workers in technology, advertising, human resources and consulting – sectors undergoing restructuring and disruption from artificial intelligence – followed by oil and gas, energy services, financial services and real estate.

“Many of these headcount reductions are driven globally, even though they affect employees in the Middle East and often have no bearing on the region’s business climate, performance of local subsidiaries or even regional profitability,” Carrington Malin, a UAE-based technology consultant, told AGBI. 

In Dubai, Mavath said data shows layoffs continuing steadily, with about 10 to 15 employees losing jobs each month on average through ongoing company restructuring. 

“It’s like an efficiency sprint,” he said. 

“That makes it incredibly difficult for low- and mid-tier white collar workers and new graduates to find new jobs.”

Real estate agents told AGBI they are seeing residents adding co-occupants to leases or subletting rooms to avoid defaulting on rent payments. 

“Some families are letting out their children’s rooms,” one agent said.

For landlords, Mavath said, collection costs are rising as more time is spent recovering payments, adding pressure to cash flows.

• New rental index for Dubai to curb rises and disputes
• Saudi to offer foreign home buyers ‘lifetime’ residency
• UAE’s cashless drive stymied by the humble rent cheque

Takeem, which has won the Create Apps award under the patronage of Dubai crown prince Sheikh Hamdan bin Rashid Al Maktoum, and Proptech of the Year at the World Realty Congress, is designed to remove residential rental pain points for investors.

Despite the jump in defaults, Mavath said the market is not in crisis. 

Annual rent price growth in Dubai slowed to about 11 percent in the Q3 2025, down from the 13 to 15 percent pace seen through much of 2024, according to consultancy Cavendish Maxwell.

“We’re not talking 2008 or 2020. We’ve just come off some massive boom years where the default rate did decline until 2024,” Mavath said.