The Dubai real estate forecast for 2025 was revealed by Arash Jalili, CEO and Founder of Unique Properties. The report included key drivers, trends and numbers to shape the market this year.
The past year saw Dubai’s real estate market achieving remarkable milestones. According to Property Monitor’s August 2024 report, the market recorded unprecedented transaction volumes, with expectations of surpassing 170,000 transactions by year-end.
The city’s property prices increased by 16 per cent compared to the previous peak in September 2014, reaching an average of AED 1,431 per square foot. August 2024 alone registered 16,145 sales transactions, marking a record for the month, with residential properties accounting for 93.9 per cent of the activity.
This sustained growth is attributed to factors such as the legacy impact of Expo 2020, a recovering global economy, and Dubai’s status as a safe haven for investors during uncertain times.
Key drivers for 2025
Several critical factors are set to drive the market’s continued expansion:
- Population growth and expatriate influx: Dubai’s population is expected to surpass four million by 2026, fueled by expatriate arrivals and government initiatives aimed at attracting global talent. This growth will sustain demand for residential properties, particularly in emerging areas like Dubai South, Jumeirah Village Circle, and Dubai Hills Estate.
- Foreign investment and regulatory reforms: The implementation of policies allowing 100 per cent foreign ownership of commercial companies outside free zones and the expansion of the golden visa scheme have made Dubai increasingly appealing to high-net-worth individuals. This is expected to boost demand for both commercial and luxury real estate.
- Tourism and short-term rentals: With Dubai welcoming a record 9.31 million visitors in the first half of 2024, the short-term rental market has experienced significant growth. Events such as COP28 and a strong international conference calendar, will likely support a robust short-term rental market into 2025.
Market projections for 2025
- Residential sector: Moderate price growth is anticipated, particularly in mid-range properties, as supply begins to catch up with demand. While prime residential values saw an 18.2 per cent increase in the 12 months leading to March 2024, 2025 is expected to bring more balanced growth.
- Commercial real estate: The sector is set for substantial expansion, with increasing demand for office spaces driven by hybrid working models and business growth. Green office spaces, particularly in districts like Dubai Silicon Oasis, will attract environmentally-conscious corporations.
- Luxury and ultra-luxury properties: The luxury segment will remain a focal point, with strong demand continuing in areas such as Palm Jumeirah, Emirates Hills, and Bluewaters Island. High-end properties have already recorded a 24.3 per cent increase in villa values over the past year.
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