Sustained investor confidence, an expanding luxury segment, and continuing commercial demand are set to drive Dubai’s real estate market’s upward trajectory and turn 2025 into another record-breaking year.
An Engel & Volkers Middle East report said strong economic fundamentals, population growth, and strategic government initiatives has helped Dubai to reinforce its position as one of the world’s most attractive real estate investment destinations.
The luxury sector sales remained robust, with sales of properties (exceeding AED10 million) rising by 20.5 per cent year-on-year. Fourth-quarter sales narrowly surpassed the record-breaking performance of the same quarter last year.
A demand-supply imbalance in commercial space led to double-digit rental growth, with office rents rising by 11 per cent, retail rents by 9.7 per cent, and warehouse prices surging by 21.1 per cent.
Total residential real estate transactions surged by 40.3 per cent to 170,992 units, more than five times the number recorded in 2020. With investors seeking high-potential opportunities amid a tightening secondary market, off-plan transactions dominated and accounted for 63 per cent of total sales, up from 54 per cent in 2023.
Dubai’s real estate market thrives
Apartment sales played a critical role in this expansion, with transactions increasing by 47.6 per cent, contributing to 89.6 per cent of the overall real estate market’s growth. The report added that popular investment hubs such as Jumeirah Village Circle, Business Bay, and Dubai Hills Estate led off-plan sales, while prime locations like Dubai Marina, Downtown Dubai, and Jumeirah Lakes Towers dominated in the ready-to-move segment.
The commercial real estate sector also delivered a strong performance, reflecting the emirate’s growing prominence as a global business hub. With over 24,000 new businesses registered in the first half of 2024, demand for premium office spaces surged, pushing occupancy rates in DIFC, Downtown Dubai, and Business Bay to 95 per cent to 97 per cent.
Developers like Aldar Properties are responding to the situation, unveiling plans for a Grade A office tower on Sheikh Zayed Road, and further commercial launches expected in 2025.
The commercial sector is expected to see further expansion, particularly in high-demand districts such as DIFC, Business Bay, Jumeirah Lakes Towers, and Al Quoz, as companies seek Grade A office spaces and state-of-the-art industrial facilities.
Daniel Hadi, CEO of Engel & Völkers Middle East, commented: “The combination of capital appreciation, high-rental yields and increasing foreign investment continues to solidify Dubai’s position as a top-tier global property market.
“As one of the world’s fastest-growing real estate markets, we will continue to witness the emirate’s ability to attract global capital, high net-worth individuals and multinational corporations. The growth we witnessed in 2024 provided a solid foundation to anticipate another record-breaking year in 2025.”
Investor sentiment remains highly optimistic, supported by new mega-developments such as Palm Jebel Ali and The Oasis, which cater to ultra-luxury buyers. Dubai’s government-led initiatives, including visa reforms, free zone incentives, and a streamlined regulatory framework, continue to enhance the city’s appeal to businesses and investors.
“With continued infrastructure investments, mega-project launches, and sustained foreign interest, the emirate’s real estate sector is well on track to surpass expectations, reinforcing its status as one of the most lucrative and resilient property markets worldwide,” added the report.
