Studio & 1-Bed Apartments in Dubai: Are They Still a Good Investment in 2025?

If we look at the overall trends of the population in Dubai, then we will see that in early 2025, Dubai witnessed a huge surge in its population from the previous year, and rose to 3.9 million. This value is projected to increase to reach 4 million by the end of 2025.

This continuous rise in the population as a whole and in the different sectors leads to a surge in the demand for studio and 1-bed apartments as generally the people that migrate to the city are newcomers and are not sure about their future in the city and some do not even have abundant resources, so they prefer to invest in cheaper properties.

Government policies attracting expatriates to Dubai

The Dubai Government has always surprised the world with its creative strategies, planning, and forward-looking mindset, evident by its initiatives like the Dubai 2040 Urban Master Plan and the Dubai Economic Agenda D33. 

Some of the policies of the government that attract expatriates to migrate to this city:  

• Golden Visa or Gold Card Program - The launch of this system led to an easing of foreign ownership regulations, making it easier for foreigners to live and work in the city. Talented professionals are eligible for a 5 or 10-year residency.
• Cultural Visa - The Dubai government’s decision to grant 1,000 cultural visas to artists and creators back in 2021 led to an increase in the number of skilled and talented artists and creators migrating to the city.
• Visa Scheme for Remote Workers - In October 2020, the Dubai Government introduced a tailored visa scheme, making it possible for remote workers and their families to migrate to Dubai.
• Dubai 2040 Urban Master Plan - This initiative by the Dubai government includes increasing the public beaches by 400% to enhance green spaces by 2040. The plan’s projection of a daytime population of 7.8 million by 2040 would include around 2 million daily visitors from neighbouring emirates. 
• Free Zones - The development of economic zones has contributed to Dubai’s reputation as a business-oriented destination and thereby helped in attracting business professionals.
• Policy for Foreign Ownership of Companies - In 2021, a significant policy was introduced, allowing 100% foreign ownership of companies, which was previously 49% ownership.

Studio & 1-Bed Apartments are Affordable

Average Property Prices of Studio Apartments in Popular Locations

Average Property Prices of 1-Bed Apartments in Popular Locations

From the above tables, it is clear that the rental and sales prices of studio and 1-bed apartments are comparatively lower compared to the other configurations and types of properties, thereby making them an affordable and cheaper option for many expatriates and migrants. Even the prime locations, such as Downtown Dubai and Business Bay, can be, to some extent, a little affordable for some buyers and investors who are seeking to buy properties in these prime city locations.

Dubai is a magnificent haven of luxury and is popularly known as “The City of the Future”. To become a part of this lifestyle and enjoy the various benefits of the immaculate planning strategy and infrastructure of Dubai, many people migrate to this city from worldwide. 

Most of these migrants opt to live in studio or 1-bed apartments due to several reasons, be it the pocket-friendly nature of these apartments or the uncertainty of the migrants' stay in the city.

Let’s take a closer look at some of the segments of the population who prefer to live in studio and 1-bedroom apartments in Dubai:

• Singles and Nuclear Families - These residences are perfect for this set of people as they tend to seek comfortable, budget-friendly, and low-maintenance residential options for themselves.
• Students - With the growing demand of Dubai’s educational sector globally, many students migrate to this city in search of better education. These students prefer to live in a cheaper, private, and compact environment to concentrate on their studies. 
• Young Professionals - Many young professionals move to Dubai in search of job opportunities and seek a modern and convenient lifestyle in prime locations of Dubai. Their requirement flawlessly aligns with the studio and 1-bedroom apartments in Dubai.
• Investors - A huge number of international investors move to Dubai every year to earn profits from real estate investments in Dubai. The studio and 1-bed apartments in Dubai offer the investors strong rental demand from expats, students, and professionals, thereby higher earnings and profits.
• First-Time Buyers - The affordability of these apartments makes them a premium choice for first-time buyers to enter the real estate market of Dubai. 
• Young Couples - Couples who seek comfort and a sense of privacy in their lives, with lower purchase prices, may opt for the studio and 1-bedroom apartments.
• Newcomers to the City - People who are new to the city may opt for these residences as they are easily manageable, pocket-friendly, and less risky investment options.
• Budget-conscious Individuals - Individuals looking for housing options with lower purchase prices and costs, such as utilities and maintenance costs, choose to pool their resources in the studio and 1-bed apartments in Dubai.

In recent years, there has been a significant rise in the demand for rental properties. According to the recent analysis and reports, Dubai’s rental market is experiencing a steady rise in 2025, especially in communities such as International City, Jumeirah Village Circle (JVC), Jabal Ali First, etc.

From the above graph, we can see that in 2025, International City, famous for its affordable housing options, has seen the highest increase in the number of rental transactions for studio apartments in Dubai, reporting 4,245 transactions. Whereas Dubai Marina, another prominent community which is popular for its Dubai Marina Mall and Dubai Marina Walk, recorded a total of 1,433 transactions. 

From the above analysis, it is clear that Jumeirah Village Circle (JVC), International City, and Jabal Ali First are witnessing high rental demand for 1-bedroom apartments with 5,303, 4,671, and 3,968 transactions, respectively.  

There has been an increase in the short-term and long-term rental properties caused by several factors and parameters, such as the change in the global situation since the COVID-19 pandemic, increase in the number of expatriates, and the rising search for comfort and flexible working environments. Long-term rentals have seen significant demand, especially since the pandemic, as many companies have started opting for remote work structures. Expatriates, who originally rented properties for short durations, have now started opting for long-term leases.

Dubai is witnessing a surge in its rental prices. Due to the rising rentals, the studio and 1-bedroom apartments are experiencing high demand due to their affordability. Many existing tenants and new migrants are opting for these smaller units due to their lucrative and affordable prices.  

Many communities, such as Dubai Silicon Oasis, Dubai Marina, and Business Bay, have seen a constant rise in their rental prices. As discussed above, we can infer that Jumeirah Village Circle (JVC) and International City are some eminent and top communities for rental transactions concerning studio and 1-bedroom apartments. Despite the growing demand for tenants, Dubai’s properties continue to face high rental prices. Moreover, the consistent rise in the population in Dubai since the COVID-19 pandemic has been fueling the constant surge in rental and property prices. 

Factors Influencing the Rental Prices

Some of the key factors that influence the prices of rents in Dubai are:

• Location - It is one of the most important and biggest boosters to the rental prices in Dubai. The proximity of the apartment to the industrial, business, and recreational hubs and the overall location of the apartment greatly influence its prices. Moreover, the rental prices of the properties are high in prime locations having access to all the premium facilities and amenities, such as educational and medical institutions, leisure activities, etc. For example, the apartments in Dubai Marina and Palm Jumeirah have higher prices due to their strategic location, connectivity, and amenities.
• Government Policies - The Dubai Land Department (DLD) and its regulatory body, the Real Estate Regulatory Authority (RERA), manage and govern the real estate market in Dubai. The new RERA Rental Index introduced by RERA allows the landlords to hike the prices considerably, thereby protecting the interests of the tenants.  
• Trends in the Market - The economic situation in the market plays an important role in determining the prices of rents in Dubai. The changes in the economic conditions in the market, such as a boom or recession, continuously influence the rental prices of the properties. The booming economy and high foreign direct investments lead to a rise in the number of tenants and leading to a surge in the rental prices.
• Lifestyle of Luxury - Dubai is the epitome of luxury and convenience. Many people migrate to this city in search of better job opportunities and a higher standard of living. The more luxurious and full of facilities the apartment is, more the rent of the apartment will be. Apartments with amenities such as playgrounds, gyms, and swimming pools have a comparatively higher rent than other residences. 

• Smaller residential units—such as studios, 1-bedroom apartments, and compact townhouses—play a significant role in enhancing market liquidity. 
• Faster Turnover and Transactions - Small residential units tend to sell out faster compared to large ones due to their affordable prices and greater demand. These units involve shorter decision-making cycles, speeding up transactions and thereby increasing the volume of trades, which is a key element of liquidity. 
• Flexibility for Investors - The lower purchase price of the smaller residential units helps in the portfolio diversification of the investors by acquiring multiple small units rather than tying up capital in a single large asset, making them a flexible option for investors interested in shifting their portfolios and exiting the market.
• Urban Trends and Demand - These smaller units meet the modern lifestyle requirements of the growing urban population of Dubai for residing in prime locations with efficient and comfortable living spaces. This ensures continued demand and transaction flow, which sustains liquidity over time.
• Strong Rental Returns - The smaller residential units, like studios and 1-bedroom apartments in Dubai, deliver better rental yields, making them an attractive option for investors. This creates more demand in both sales and rental markets, keeping the market highly liquid and active.

Smaller residential units contribute to market liquidity in Dubai by being more affordable, easier to trade, and attractive to a diverse group of buyers and investors. Their popularity supports a dynamic, active real estate market where transactions happen more frequently and smoothly.

The studio and 1-bed apartments in Dubai offer high returns, investment potential, and capital appreciation.

Some communities that offer high ROI include:

Jumeirah Village Circle (JVC) - According to the data statistics, the studios and 1-bed apartments in JVC offer 8.09% and 15.39% returns on investment. 

Dubai Marina - Another prominent community in Dubai, known for its calming and peaceful walking promenade, offers high ROIs for its studio (5.77%) and 1-bedroom apartments (12.92%).

Dubai Production City - This community is a popular destination for various buyers and investors due to its high returns on investment. The studio apartments in this community serve the highest ROI in comparison to the other configurations at around 9.30%, whereas the 1-bedroom apartments offer 8.37%.

Dubai Silicon Oasis - This area is another such community that offers high Returns on Investment (ROI), ranging from 9.53% for studio apartments to 8.65% for 1-bed apartments.  

These numbers clearly indicate the reasons for the rising demand and need for these apartments, making them a good investment in 2025.

Dubai, the city of magnificence, grace, and unprecedented success, is experiencing a rising demand for studio and 1-bedroom apartments due to the high tenant demand, increasing population, affordable pricing, high investment potential, rising rental prices of larger units, etc, making these units a good and profitable investment in 2025. Dubai’s real estate market is showcasing a tremendous increase in transactions, mainly due to the consistent rise in the population of the city, with the entry of various expatriates and migrants in search of either better job opportunities or a higher and luxurious lifestyle.

If you are also interested in investing in these beneficial and profit-earning properties, then you can reach out to Dubai Housing, a trustworthy and credible source that provides guidance and informational insights on the real estate market of Dubai.