Future of Dubai real estate market

Future of Dubai real estate market. An overview of recent trends and events, in Dubai real estate market. Its importance for property investors and buyers.

Dubai is a well populous emirate, in the UAE. It is one of the most famous and popular emirates, among others. It is well-known for its luxurious lifestyle, cutting-edge architecture and endless business opportunities. Many business professionals are coming to the city for opportunities. Due to huge influx of population (and the number is growing) Dubai became an investment hub. As real estate market constantly developing, many investors chose Dubai as the perfect place for investment in real estate. People started investing in Dubai real estate market long time ago. They saw it as a valuable place to invest their money into, even 40 years ago. Dubai was always a safe and stable city for investments, and it proved it till this time. It is a well-known politically and economically stable city, in the region. Even though the city keeps its stable growth and development, not all sectors remain the same. Real estate market, as in every other country, went through numerous fluctuations, ups and downs as it mainly depends on external world factors. Major world events, changes in the stock market, political changes in some other countries always affect real estate market in general, and in Dubai in particular. It is important to understand what these fluctuations can mean for the investor and what benefits to expect. We will showcase key recommendations and suggestions on how to navigate in Dubai real estate market, and how to make calculated decisions. So, buckle up.

Dubai real estate market during 2023-2024

Based on the Property Finder report (one of the most reputable property portals in UAE), Dubai real estate market showed a steady growth in the year 2024 with increased sales and rental prices, comparing to the same period in the previous year. Selling price of the apartment has increases by 3.6%, when selling price of villas – by 2.2%. Demand for affordable housing has increased, especially on middle price apartments and townhouses. It will likely to continue in 2025, as Dubai government is working on increasing affordable and functional houses.

Details of a sales volume of Dubai in January, for each year
As people are becoming more health-conscious, they tend to transfer it on all aspects of their life. That is one of the main reasons of rapid growth and demand of eco-friendly housing. Developers starting to use more eco-friendly items and technologies in their projects, such as solar panels, energy saving appliances and greenery. What is more, environmentally friendly materials have been used more often, comparing to previous years. Such strategy will improve not only Dubai real estate, but also experience and health of its users.

Latest trends in luxury Dubai real estate

Dubai is well-known for its luxury real estate that can serve the demand of each and every high-end investor. According to the Knight Frank report, Dubai is among top 10 cities based on the number of elite real estate. It is mentioned in the report, that as of 2022 the average selling price of an apartment in Dubai was AED 5.5M (€ 1.4M). The average selling price of a luxury villa was recorded as AED 17M (€ 4.32M).

Another trend that reached Dubai and gained its popularity is branded residences. It is elite residential complexes, run by luxury hotel brands such as Armani Residences in Burj Khalifa and Bvlgari Residences in Jumeirah Bay. Such residences offer its investors luxury amenities, prime living location, opportunity to immerse themselves in a luxurious lifestyle, associated with the famous hotel brand…as well as enjoy privacy and comfort of their own home.

Real estate investment opportunities

Dubai real estate market is wide, and offers numerous investment opportunities for residents together with foreign investors. According to the JLL report, Dubai real estate market is expected to grow (CAGR) by 6.6% over the period of 2023 – 2025. The main reasons to such growth are growing economic performance and governmental initiatives of the UAE, and Dubai rulers in particular.

One of the best investments is property which is under construction (off-plan). Investors, interested in such properties, can purchase them at a lower cost, comparing to ready units. The reason is, off-plan property has a payment plan, which can stretch to 3, 5, or even 7 years. There is no need to pay the whole selling price of the apartment immediately. Rather it will follow a particular payment plan. The other benefit of investing in a off-plan project is an opportunity to sell it during the construction time and gain income, as closer to completion date the property will increase in price. an investor can benefit from a capital gain.

For those investors who wish to keep their property, there is another profitable way of getting benefit from the purchase, which is short-term rent. As the population of the city increases and more professionals are moving to UAE, demand for the short-term rental properties has increased, since the last few years. Increasing number of tourists, especially during holidays, affect short-term rental market. More and more property owners transform their apartments into holiday-homes or suitable apartments for the short-term stay. Such practice suffices the need of tourists / residents and property owners.

How to invest in Dubai real estate market?

There is a number of investment opportunities, for those who prefer to invest in Dubai real estate market, such as:

• Affordable housing.

Demand for affordable property, in Dubai, will continue growing in 2025. This is a great opportunity for those investors who don’t have a huge budget, but still looking for the quality and profitable apartments or villas. According to Property Finder, such areas like Dubai South, Discovery Gardens are perfect options for those who are looking for an affordable property with the great future potential.

• Branded property.

Alongside development of an affordable housing, demand for luxury property increase, as well. In order to bring uniqueness to its projects, developers started collaborating more actively with big brands such as: Bvlgari, Elie Saab, Jacob & Co, Mercedes, Bugatti, etc. such projects are presented mainly in Downtown areas or beachfront, bringing exclusivity, luxury together with high liquidity, to its owners. Unique projects like this are on of a kind, which means that they will increase in price more, over time, comparing to other luxury projects. Such projects, after completion, bring their owners capitalization 2-3 times higher, comparing to initial cost.

• Eco-friendly property.

The popularity of eco-friendly property has increased, in Dubai. More developers started on a better living environment by using solar panels, smart systems, greenery and plants, ionizing air technologies, and more. For instance, properties in Dubai Sustainable City and Al Barari areas are developed with these technologies.

• Off-plan properties

Investors in off-plan projects will benefit in a long run, due to the price difference – higher property cost upon completion. Before choosing an off-plan project it is crucial to consult a property advisor and collect enough information on the area and future investment opportunities, as such investment may involve certain risks.

Real estate investments for investors

Taking into considerations investors, we can present a number of profitable investment opportunities, such as:

• Rental property

According to the Property Finder report, rental income increased by 8,1% in Dubai, in 2024. It proves that investing in property with the aim of renting it out is one of the best investment options as constant income guarantees. Busy areas such as: Business Bay, Meydan and Jumeirah Village Circle (JVC) are among top investor’s choices.

• Commercial property

Commercial real estate market is steadily growing in Dubai. As the number of newly opened or relocated companies growing, it creates higher demand for office and retail spaces. According to JLL report, total annual growth rate (CAGR) of Dubai commercial real estate market is expected to be 5% over the period of 2023 – 2025. For those who are interested in commercial investments, consider such areas as Business Bay, Dubai South, Emaar Creek Harbour. For those who wish to explore different city, there are plenty of opportunities and available options.

Real Estate Investment Trust (REIT)

REIT offers wide access to Dubai real estate market. REIT presented as a company that owns and manages real estate, generating passive income. Such way of investments allows investors to invest in multiple properties, increasing its portfolio. Some popular REIT include Emirates and ENBD REIT.

Conclusion

Dubai real estate market offers highly profitable investment opportunities for investors, together with end users. Stable economy growth and constant governmental support with numerous initiatives made market grew even more, in 2024…which will continue in the coming years. The tendency for affordable housing will remain high in the year 2025 as government presented a number of new development strategies and increased funds that will bring more affordable properties into the market. Growing demand for eco-friendly property will bring more innovative and improved properties.

Based on the above information, end users should consider affordable and eco-friendly housing as it will cater to their needs. When it comes to investors, who prefer to get good ROI, they should look into commercial property, property with high potential for short-term rent and REIT.

With a huge amount of information and hundreds of projects, it might be difficult, for an investor, to make the right decision. That is why it is important to consult a specialist, get all required information and make the right decision. Our experienced professionals will help to find the right project or investment opportunity based on your needs and budget. We don’t just advice, but walk you through the whole process in order to make purchase faster and risk-free.