Dubai’s real estate market is set for continued growth in 2025 amid ongoing developments, rising property values, increasing rental demand and strong investor confidence. In 2024, Dubai’s real estate transactions are set to grow 30 percent year-on-year as the sector continues to break records for sales, prices, mortgages, and launches. Annual sales transaction volumes have surpassed 151,000 and eclipsed 2023 year-end sales by 13.4 percent.
This growth is driven by economic resilience, innovative government policies and evolving market trends. Dubai reported the delivery of 7,400 units in Q3 of 2024, with another 13,500 slated for Q4. Rent increases for apartments by 19.1 percent and villas by 12.5 percent also reflect strong demand for quality accommodation in well-serviced communities.
5 trends shaping Dubai’s real estate market in 2025
According to Elite Merit Real Estate, there are 5 trends shaping Dubai’s real estate landscape in the coming year:
Rental market surge
Rental prices in Dubai will rise significantly next year, with forecasts predicting an average increase of 18 percent in short-term rentals and over 13 percent in long-term leases. This surge is attributed to the continuous influx of international professionals and escalating property prices.
In November 2024, Dubai’s real estate market witnessed a 20.8 percent surge in average annual rent prices, reaching AED90,288 ($24,581.74), despite a slight annual decline in transaction volume. The rental market demonstrated overall stability in November 2024, with total rental transactions reaching AED3.53 billion, reflecting strong demand for quality rental properties and reaffirming Dubai’s appeal as a global hub for residents and investors, said Springfield Properties in its latest report.
Short-term rentals in Dubai are also reshaping the rental market, with a 30 percent increase in demand compared to this time last year. Industry experts claim that the trend is revolutionizing the region’s real estate scene, offering remarkable returns for savvy property owners, and attractive accommodation options to visitors.
Property Finder’s “Opening Doors: Insights, Trends and Forecasts for Real Estate” report reveals that most short-term renters with families, for example, prefer lifestyle-oriented communities with vibrant assets and good connectivity. While consumers seek unique experiences curated by diverse hosts. For investors, this is an opportunity to select properties that promise the best returns.
Luxury real estate on the rise
Luxury real estate in Dubai is thriving, with property prices in prime areas like Palm Jumeirah and Emirates Hills witnessing a 20 percent annual increase. Developers are set to complete nearly 9,000 luxury villas by the end of 2024, with an additional 19,700 slated for 2025 to meet growing demand. These exclusive properties, which include state-of-the-art amenities and iconic architecture, continue to attract global investors.
Last year, Dubai’s luxury home market hit record highs, with sales of $10 million-plus homes nearly doubling to $7.6 billion, surpassing London and New York, according to Knight Frank. Dubai’s super-prime market, comprising properties valued at $25-million-plus, also experienced a surge, with 56 deals totaling $2.3 billion, double 2022’s total.
During the first five months of 2024, Dubai recorded 948 sales in the luxury property segment, each valued at AED15 million or more. These high-value transactions took place in areas such as Palm Jumeirah, Mohammed bin Rashid City, Dubai Water Canal, Tilal Al Ghaf and Dubai Hills Estate, property company Betterhomes revealed.
Over the last year, Dubai has also maintained its position as a global leader in branded residences, leveraging its dynamic property market, luxury lifestyle appeal and world-class connectivity. This places the city ahead of other major prominent markets including Miami, New York, Phuket and London.
The latest study from Savills Global Residential Development Consultancy reveals that there are currently 740 completed branded residences worldwide, with a further 790 anticipated by 2031 in 100 countries. Dubai alone has nearly 140 projects, including completed and projected projects over the forecast period. This large market share reflects the city’s ability to attract global brands and deliver developments that cater to a diverse international clientele.
Technology and sustainability are shaping the future
Dubai’s real estate market integrates advanced PropTech solutions, such as blockchain for seamless transactions and AI-driven property management systems, enhancing the buyer experience. PropTech is reshaping how buyers, sellers and agents interact with properties, making processes more efficient, transparent and customer-centric.
The Dubai Future Foundation recently launched the PropTech Sandbox which aims to foster a regulatory environment that accelerates the adoption of emerging technologies, enhancing the efficiency, sustainability and accessibility of Dubai’s real estate sector.
In May 2024, the Dubai Land Department (DLD) also launched the Real Estate Evolution Space Initiative (REES) to support the wave of innovation that will redefine the urban landscape. The DLD in collaboration with Dubai Chambers also launched the Dubai PropTech Group to develop real estate innovation, attract real estate technology companies to Dubai, enhance the innovation ecosystem in PropTech and finance and support real estate technology companies in the city.
In addition, sustainability remains a top priority, with eco-friendly building designs, solar energy integration and green communities driving the development of residential and commercial projects. With global investors becoming more eco-conscious, the demand for green properties in Dubai will continue its upward trajectory. Sustainable properties could account for up to 35 percent of total property transactions in Dubai by 2025, a significant increase from 15 percent in 2020.
Economic growth and investor confidence
The UAE’s growing economy, business-friendly ecosystem, and zero taxes continue to attract investors from around the world. The Central Bank of the United Arab Emirates (CBUAE) has upheld its real GDP growth forecasts for 2024 at 4.0 percent, with expectations for acceleration to 4.5 percent in 2025 and 5.5 percent in 2026.
Notably, Dubai offers gross investment yields of 7 percent. This is nearly double New York’s yield of 4.2 percent and almost triple London’s modest 2.4 percent. For investors seeking both consistent rental income and capital appreciation, Dubai’s real estate market provides an unparalleled opportunity.
With an average sale price of just $438 per square foot, Dubai’s real estate sector presents incredible value. Despite its reputation for luxury and world-class amenities, Dubai’s property market remains accessible to a broader spectrum of buyers. Investors can enter a market that offers lavish lifestyles and state-of-the-art developments at a fraction of the cost of global counterparts.
Dubai’s appeal extends beyond affordability and yields. The city’s government has created a pro-investor ecosystem through initiatives such as visa reforms, zero property taxes, and its ambitious Dubai Economic Agenda D33. These measures have drawn global attention and bolstered the city’s reputation as a hub for businesses, expatriates and high-net-worth individuals.
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lucrative investment opportunities
With property prices expected to rise by 8 percent in 2025, Dubai offers lucrative opportunities for both individual and institutional investors. The city’s diverse offerings, from affordable housing to luxury properties, ensure broad appeal. Emerging trends, such as co-living spaces and integrated communities, present innovative options for investors seeking future-ready opportunities.
Dubai’s focus on innovation, sustainability, and inclusivity ensures its continued leadership in global real estate development. Investors, residents and businesses can expect significant opportunities as the city builds on its dynamic growth trajectory.
