Some properties are expected to shift from holiday homes to shared housing under Dubai’s new law, but hardly any are likely to move in the opposite direction, according to property managers.
“Some movement in one direction, and almost none in the other,” said Luis Santos, co-founder of First Class Property Management.
He said holiday homes work best in areas such as Downtown, the Marina, Business Bay and JBR, where units are furnished to a standard, priced per night and booked by tourists and residents between homes. Shared housing, he added, suits large units in older or outer areas, priced per room for budget-conscious residents.
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“Owners of villas and large apartments in areas with weaker holiday demand now have a clear, legal option, and some will take it,” Santos said. “That is a sensible outcome for them, and it leaves the homes that remain with a better-matched market.”
Shared housing in Dubai is being brought under stricter regulations, with more than 44 areas approved for shared accommodation. Dubai Municipality has set minimum space, safety and facility requirements, while landlords must obtain permits and comply with occupancy rules. The measures aim to curb overcrowding and protect tenants’ rights.
Shared housing is permitted across 28 communities, including Al Ras, Al Dhagaya (Deira), Al Bateen, Naif, Al Rigga, Al Muteena, Al Muraqqabat, Hor Al Anz, Al Rashidiya, Al Nahda 1, Al Qusais, Al Twar 5, Al Nahda 2, Muhaisnah 4, Karama, Oud Metha, Jumeirah 1, Al Barsha 1 and Al Warqa 1, among others.
In other areas, shared housing is permitted only in designated parts of the community. These include Abu Hail, Al Baraha, Al Hamriya, Mankhool, Al Jaffiliya, Al Hudaibiya, Al Satwa, Port Saeed, Hor Al Anz East, Al Mamzar and Al Qusais Industrial Areas 1, 2, 3, 4 and 5.
Separate markets
He ruled out a shift the other way. A holiday home must be let as a whole, furnished and classified unit, he said, so “the two markets separate more cleanly, and each property ends up in the use that suits it best.”
Shilpa Mahtani, co-founder and managing director of bnb holiday homes, agreed that the two models are not interchangeable.
“There may be some movement depending on the location, demand and returns,” she said.
Dubai Law No. 4 of 2026 requires a permit before any unit can be designated for shared housing. It also governs occupancy and management of such units. The law took effect at the end of August. Owners and operators already running shared units have one year to comply.
Dubai Municipality oversees shared housing, while the Dubai Land Department manages an electronic registry of approved units, tenancy contracts and residents.
Santos said the direct impact on holiday homes would be “very little”, as they fall under a separate regime.
A holiday home is a whole furnished unit let for stays of under six months under a DET permit. Shared housing covers rooms and bed spaces for residents on long contracts. It needs a municipality permit, an approved occupancy limit and a contract registered with the land department. Repeat violations can attract fines of up to Dh1 million, he said.
The real effect, he said, is on the informal market in between.
Mahtani said the regulations will “help create a more structured and transparent accommodation market”.
Holiday homes serve tourists, families and corporate travellers seeking privacy and hospitality services, she said, while shared housing addresses the need for affordable, longer-term accommodation.
Impact on rentals
Neither executive expects the new law to move holiday home rates significantly, as the customers are different.
“A family visiting Dubai or a professional relocating for three months isn’t choosing between a holiday home and a bed space,” Santos said.
If there is any effect, he said, it is a supportive one, as the budget end of short stays is now regulated and registered.
Mahtani said rates are driven mainly by tourism demand, seasonality, events and location. Any impact, she said, is likely to be “localised rather than across the market as a whole”.
Winter bookings made by October 1 were priced 12 per cent higher for October, 19 per cent for November and 18 per cent for December than a year earlier, according to the First Class UAE Short-Term Rental Index.
Clarity for owners, guests
Santos said the shared housing law is “good for Dubai and good for our industry”.
Annual leases are registered through Ejari, holiday homes fall under DET, and shared housing comes under Dubai Municipality, with contracts registered at the land department.
He said this helps owners choose the right use for each property. It also supports professional operators.
One point to watch, he said, is advertising.
The law, according to Santos, bans promoting shared housing without a permit, and booking platforms already check holiday home permit numbers, so a room let without a permit “shouldn’t be able to appear as a holiday home either”.
With existing shared properties given a year to comply, he said, 2027 is when the clean-up should show in the numbers.
Mahtani said Dubai’s strength lies in offering different accommodation options for different needs. “Holiday homes are about delivering a hospitality experience, not simply providing a place to stay,” she said.
Source: Khaleej Times