Dubai’s real estate market is set to continue its upward trajectory in 2025, with an anticipated 8% price growth following a remarkable 20% surge in 2024. Knight Frank’s latest report indicates that the luxury segment, particularly waterfront villas, will lead the charge with a projected 5% increase.
The emirate’s robust performance has elevated its housing market to new heights. Over half a million homes have been sold since 2002, with a significant portion, estimated at 95,000, now valued at over $1 million. Faisal Durrani, head of Middle East research at Knight Frank, highlights the dramatic shift: “A million-dollar home is now the norm for single-family residences, reflecting the extraordinary price appreciation in recent years.”
Dubai’s strategic response to the pandemic and liberal visa policies have attracted a wave of foreign buyers, fueling demand across the market. The luxury segment, in particular, has seen heightened interest from wealthy investors, including Russians, crypto millionaires, and Indian buyers seeking second homes.
Unlike previous speculative booms, analysts believe this growth is more sustainable. Strong fundamentals, including regulatory measures like higher down payment requirements and a predominance of end-users, mitigate the risk of a downturn.
In 2024, sales activity reached record levels, with third-quarter transactions totaling a staggering $31.7 billion. To meet the increasing demand driven by population growth, developers are gearing up to construct 300,000 homes by 2029. However, the market is currently grappling with acute supply constraints, especially in the villa segment, which is expected to further fuel price growth.
