Against the backdrop of escalating geopolitical tensions and a challenging economic situation internationally, the property market in Dubai is showing steady growth. In particular, this is confirmed by the results of a survey conducted by ValuStrat, a company known for its accurate statistics. According to experts, in annual terms, the price of flats in the UAE rose by 24.8%, and villas – by 33.1%.
Impressed by such serious figures, analysts of the well-known in the Arab Emirates and Europe agency S&P Global, made their own forecast for the Dubai property market for 2025. The main conclusion of experts: during the next one and a half years rental rates, as well as the cost per square metre in new buildings and in the secondary market will remain stable. Further, with a high probability due to the rapidly growing supply, the market may become saturated and prices will go down slightly.
What Factors Affect The Market
- Speed of construction and commissioning of new facilities. A record number of offers are coming to the market almost every month. It is expected that in the period from 2025 to 2026, about 182 thousand projects in the field of residential, office and commercial property will be successfully completed in Dubai. And this is without taking into account the intensive development of the Emirates in the last two years.
- Population growth. The Arab Emirates retains its attractiveness to entrepreneurs of all levels. According to available forecasts, Dubai’s population will continue to grow by at least 3% per annum between 2025 and 2026. Thus, more than 4 million people will be living there by December 2026.
- Sustainability of Dubai’s economy. Strange as it may seem, the military conflict that has been escalating in the Middle East region has had virtually no impact on the Dubai economy. Analysts at S&P Global believe that the UAE’s GDP growth will exceed 3% annually from 2024 to 2027.
Following a ‘hot’ summer 2024, Dubai’s property market experienced an equally ‘hot’ autumn:
In September, the number of transactions exceeded 18 thousand, which is an absolute record for Dubai.
The average market value of apartments in Dubai reached 353 thousand dollars, townhouse – 7 251 thousand dollars, villa – 1.9 million dollars.
One of the main reasons for the stable demand for Dubai property from foreign investors is the possibility of accelerated visa registration. It is an analogue of a two-year residence permit, which can be extended if necessary. Residence permit is issued for the purchase of real estate worth from 204 thousand dollars.
Current Trends In Dubai’s Property Market
Ahead of the new year 2025, UAE realtors and developers highlight the trends that have emerged in the property market this year and are likely to continue in the coming months.
Price Changes
Over the last twelve months, the average price of housing in Dubai increased by 21.3%. Villas showed the strongest growth per sq m at 24.3%. In October, the rate per sq. m in country cottages reached 5 thousand dollars, which is 28% more than the peak figures of the crisis year 2014. According to experts, in Q2 and Q3 of 2024, a serious increase in prices for villas is due to the attractiveness of luxury residences and secluded cottages on the sea coast.
In any case, it is now safe to talk about a noticeable rise in the premium property sector in the UAE. The average value of transactions in VIP-locations of Dubai: Jumeirah Islands, Palm Jumeirah, Emirates Hills by mid-summer 2024 reached 10 thousand dollars per square metre, demonstrating an increase of 7% compared to the previous reporting period.
What Is Available To Buy In Dubai Now?
The number of available offers in 2024 is still below demand. In summer and early autumn the number of new offers on average decreased by 22.8% compared to 2023 and for the first time in two years fell below the mark of 100 thousand.
The shortage of offers is most noticeable in the same category of premium property. Over the past twelve months in four areas: Palm Jumeirah, Jumeirah Islands, Jumeirah Bay Island, Emirates Hills, the number of available for purchase objects decreased by 47%. At the beginning of November, there were 2,800 lots for sale.
What Are Foreigners Interested In?
The requirements and expectations of investors planning to buy property in the Arab Emirates are in line with the trends of the international market: security and privacy of residence, proximity to green areas and the sea coast, modern transport infrastructure. It is noteworthy that a couple of years ago the first place was occupied by the profitability of the acquired property, but the priorities have changed.
Experts point out that, on the one hand, the UAE has indeed seen a shift in investment objectives: foreigners are increasingly buying housing not only to generate income, but also for their own residence. This trend provokes a sharp reduction in the volume of available offers. In turn, the change in priorities indicates the maturity of the market, increasing its attractiveness and stimulating price growth, which has been maintained for the past 21 quarters.
What Facilities Are Being Built In Dubai?
By the end of 2029, local construction companies expect to hand over around 308,000 new buildings, of which 82 per cent are high-rise flat blocks and the remaining 18 per cent are detached villas.
According to the plans, 51,350 new properties will be handed over each year for the next six years, which is 30,000 more than in recent years. But even this figure is below what is needed to successfully realise Dubai’s ambitious vision to have more than 7.8 million people living in the emirates by 2040. To meet the projected demand, at least 73,000 properties must be built in Dubai each year in the coming years. If nothing changes, the supply shortage will persist and will only grow.
The Bottom Line
Firstly, despite rising prices, interest in Dubai property among foreign investors has not waned. This is largely due to the efforts of the Emirate authorities. Today housing in Dubai is perceived by re-locants as a comfortable and safe place to live. Such positioning of the ‘product’ is the best guarantee of long-term demand for it.
Also read: Rehab at Nova Recovery Center
Secondly, high demand stimulates property developers who invest in the development and launch of new projects. But hardly all of them are ready for tough competition, so today’s buyers should be very careful when choosing a future neighbourhood to live in.
