Dubai’s real estate market is experiencing remarkable growth, driven by a rising population and sustained demand, a new industry report highlighted.
According to ValuStrat, by March 2025, the population reached 3.92 million, with 89,695 new residents added in just the first quarter. The demand for housing has surged, leading to an estimated 61,580 new homes expected to be delivered this year, with 19 percent already completed in Q1.
Residential market
The ValuStrat Price Index (VPI) reports significant annual increases in residential capital values. Apartment prices rose by 21.4 percent, while villa prices increased by 30.3 percent. Rental rates have also surged, with villa rents up by 5.1 percent and apartment rents rising by 10 percent. Despite the demand, securing affordable housing is becoming increasingly difficult. The total gross external debt of the Dubai residential sector reflects a mismatch between supply and demand, leading to a potential market correction. In Q1 2025, residential sales transactions decreased, attributed to fewer mortgage applications compared to previous quarters.
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Office market
The office sector remains robust, with a 29.1 percent annual increase in capital values and a 20.2 percent rise in asking rents. The demand for office space is fueled by ongoing economic growth and business expansion. The average office valuation stands at AED20,591 per sq m, with the highest prices recorded in Downtown Dubai.
Retail and hospitality
The retail sector continues to perform well, with Emaar Properties reporting AED4.6 billion in revenue from mall operations in 2024. Dubai Mall remains the world’s most visited destination, attracting 111 million visitors. New retail developments, like Nad Al Sheba Mall, are set to add significant space to the market. In hospitality, Dubai had 128,417 hotel rooms and 26,021 hotel apartments as of February 2025. The average daily rate for hotels rose to AED702, indicating a healthy tourism sector, with hotel occupancy stable at 87.1 percent.
Industrial market
The industrial sector also shows positive growth, with the VPI for industrial capital values reaching 152.2 points, marking a 12.7 percent annual gain. Demand for logistics and warehousing continues to increase, driven by regional economic activities.
