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Dubai: What key trends will drive the property market in 2025?

Property buyers and tenants will have more choices as much bigger supply will come online

Published: Sun 29 Dec 2024, 4:01 PM

Updated: Sun 29 Dec 2024, 7:17 PM

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Traditional factors such as safety and security, infrastructure development, population growth, high capital appreciation and rental income as well as affordability will continue to drive Dubai’s real estate market in 2025.

In addition, several upcoming projects are expected to further boost the market. The relocation of Dubai International Airport (DXB) to Dubai South and the launch of Dubai Metro’s Blue Line will drive demand for properties from buyers and tenants in 2025 in Dubai South. This is also likely to drive demand for properties in communities along key routes such as Sheikh Mohamed bin Zayed Road and Emirates Road.

All these factors make Dubai’s real estate market quite resilient even in the face of regional and global geopolitical challenges.

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Richard Waind, CEO of Betterhomes, described 2024 as a year of mixed results, with both successes and setbacks for Dubai's real estate market.

He pointed out that one of the standout positives was the significant population growth, which fuelled strong demand for both property rental and ownership.

Another key factor supported to some extent was a drop in interest rates, but the pace was slower than anticipated, he added.

The biggest surprise was transactions which were predicted to drop, but instead met with a 30 per cent surge, reaching an anticipated 170,000 transactions by year-end. Waind said that "2024 was a year of surprises".

“While some predictions hit the mark, others reminded me how unpredictable the real estate market can be," he added.

'A transformative chapter'

With 2025 on the horizon, Waind said with over 160,000 newcomers expected, he sees strong transaction volumes and sustained pressure on property prices. “Growth has become the new normal for Dubai.”

As branded residences gain traction, Waind envisions a surge in tech-branded properties. “Tesla Tower, Meta Mansions, Apple Apartments—Dubai is perfectly poised for this trend,” he noted.

Following a record year of 170 developers launching projects with nearly one every 16 hours, Waind anticipates a natural cooling-off period in new developments.

Waind remains optimistic about Dubai’s real estate prospects, emphasising the city’s ability to adapt and thrive amidst changing global and local dynamics. “Dubai’s appeal lies in its resilience and innovation. From population growth to cutting-edge developments, the city continues to set benchmarks in real estate.”

“With population growth, technological advancements, and shifting work models on the horizon, the year promises to be another transformative chapter for Dubai,” he added.

Top priorities for buyers

Fawaz Sous, CEO of Octa Properties, emphasised that safety and security remain top priorities for property buyers, particularly those purchasing outside their home countries.

“Unfortunately, the majority of the Dubai (residents) take safety and security for granted. This matter is extremely on the top agenda of people in mid to high wealth and those who are growing financially. They want safety and security,” he said.

In addition, he added that Dubai prioritises infrastructure development which is a key to boosting demand local property market and maintaining that demand as well.

“Some cities’ infrastructure is not able to catch up with the growth of the real estate sector. So the city gets a bad reputation. However, Dubai has continuously developed infrastructure even during the 2008 financial crash. Dubai didn’t stop infrastructure work. It was a very wise thing to do. Because when the time comes, infrastructure supports the growth of the property market,’” added Sous.

He added that the challenges of growing traffic in the city are also being addressed very quickly due to the population increase.

More options due to new supply

Investors who plan to buy properties in 2025 to cash in on high capital appreciation or rental gains and end-users who want to turn owners will have many more options to choose from next year due to a big increase in new supply across the emirate.

According to Cushman and Wakefield Core Research, Dubai is projected to see 42,000 new units being handed over next year compared to nearly 33,600 this year. This new supply will extensively cater to mid and affordable segments whose share and demand are likely to grow in the coming few years after a strong rally in the luxury and ultra-luxury segment.

Fawaz Sous told Khaleej Times in an interview that a large supply will come towards Dubai South and communities located along Mohamed bin Zayed Road and Emirates Road such as Jumeirah Village Circle, Dubai Silicon Oasis, Arjan, Dubai South and other communities. Of late, developers have shifted their focus towards these areas following the announcement by the Dubai Government to relocate Dubai International to Al Maktoum International Airport.

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