The future of real estate in Dubai

Owing to the local economy, the infrastructure, and the change of demographics, the property market in Dubai is on a trajectory of robust growth. Moving into 2025, opportunities and key trends indicate a promising landscape for both investments in the region and purchase of property.

As per the Dubai Real Estate Market Overview and Analysis of 3rd Quarter of the Year 2024, by DXB Interact, the total volume of sales transactions within the market reached 50,423 during Q3 – 2024, representing a 37.9 percent increase as compared to the same quarter the previous year. The average price figure is around with a price per square foot set to Dh1,511 and representing year-on-year increase of 7.5 per cent. The quarterly sales turnover stood at Dh141.9 billion, which is an increase of 30.1 per cent over the same period last year. Last year investments channeled towards the real estate business in Dubai City were around $100 billion, and this year same trends are expected to repeat.

The real estate segment enjoys increased confidence as the economies of the UAE are projected to increase by around 4.5 per cent for the year 2024-2025. Economists predict a Compound Annual Growth Rate (CAGR) of more than 8 per cent for the period between 2024 and 2029, as demand for property investment becomes stronger.

Supply and demand dynamics

In 2024, Dubai is expected to deliver nearly 100,000 new homes. In the third quarter alone, 45 per cent of the promised and scheduled units were delivered, reflecting the success in addressing the growing demand. This supply of housing clearly means that the city is working hard to meet growing demand in a competitive situation. It is noteworthy that areas like Jumeriah Village Circle and Dubai Marina are leading in units delivered as well as those which will be supplied in the future

There are, however, some challenges connected with construction and supply chain. Developers are compelled to cut cost and improve operational efficiency. Yet the continuous unveiling and listing of new properties makes the market appear unfazed by such forces.

Shifts in consumer preferences

A new trend that is emerging in the Dubai property trends is unarguably the heightened interest towards low-cost housing. Given that affordability has become an increasing challenge in recent years, developers are shifting their focus to reach a wider audience by increasing the availability of units while moderating rental growth. This transition is vital as it caters to the needs of the burgeoning mid-income bracket in Dubai

Additionally, there is a notable rise in the appetite for luxury real estate, especially amongst high net-worth individuals looking to purchase exclusive villas and waterfront properties. According to a report by Engel & Völkers, Middle East, Palm Jumeriah recorded 110 property transactions above Dh10 million in the third quarter of 2024, with three of those exceeding Dh200 million. Among the high-end sales was a penthouse that fetched Dh275 million, underscoring the strong demand for ultra-luxury homes in this prime location. Areas such as Palm Jumeriah, Emirates Hills, Bluewater’s Island and Dubai Marina continue to attract ultra-high net worth individuals, particularly from Europe and Asia.

The writer is Founder & Chairman, Elton Real Estate Development