Dubai property: Prices to soar in 2025, flooding to have ‘minimal impact’ on market
Dubai’s real estate market continues to outperform global hotspots like New York, London and Hong Kong, with no signs of a slowdown in sight, with experts saying property prices – and rents – in the emirate will continue to climb in 2025, with the recent record rainfall and subsequent flooding having only a “minimal’ impact on the realty market.
Despite economic fluctuations worldwide, experts told Al Arabiya English that property prices in the emirate are projected to climb a further five to seven percent annually in 2024 and 2025, driven by surging demand that far outstrips available supply.
“Historically, Dubai’s property market has shown resilience and continued growth despite occasional fluctuations,” says Aran Lomax, managing partner of TREO homes. “With increasing demand due to an influx of people moving to Dubai and development initiatives from the government, the growth of Dubai’s real estate market doesn’t show any sign of slowing.
“In fact, data from 2023 shows that Dubai ranks first for the most number of homes sold over $10M, overtaking established real estate hotspots such as New York, London, and Hong Kong.”
Floods to have ‘minimal impact on prices’
Zarah Evans, owner and managing partner of Exclusive Links Real Estate Broker, said the recent floods across the UAE – which left some homes submerged and many battling water damage – are unlikely to stem demand for property.
“The recent floods in Dubai may see a drop in interest in some of the communities that bore the worst of the rain, but only in the immediate months that follow,” she told Al Arabiya English. “Dubai is very quick to react positively to challenges, and this was evident immediately after the rains.”
She further said: “The government was announcing upgrades to the drainage system and developers were stepping in and offering residents free repairs on any damage. At times like this, Dubai, as a larger community, pulls together and is resilient, and any prices that have any adjustments will soon bounce back.”
Affordability and opportunity
One of Dubai’s key advantages is the exceptional value it offers buyers compared to other global cities. “In Dubai, you get so much more for so much less,” Lomax notes. “$1 million in Dubai gets you 980 sq.ft., while the same amount gets you only 355 sq.ft. in London, 366 sq.ft. in New York, 409 sq.ft. in Los Angeles, 344 sq.ft. in Singapore, and 462 sq.ft. in Sydney.”
But spacious properties are not the only thing attracting investors and residents alike. Dubai’s strategic location, business-friendly policies, diversity, and safety set it apart. “Nowhere else in the world do you get the lifestyle, diversity, and opportunities that Dubai offers, and enjoy this much safety and convenience,” says Lomax.
Founder and Chairman of DAMAC, Hussain Sajwani told Al Arabiya English that “while it is impossible to predict anything with certainty”, almost all fundamental economic indicators seem to indicate a healthy growth rate for the real estate sector in the region.
“We have witnessed robust transaction levels across all key developments in the market and a sustained rise in demand,” he added. “This has remained largely unaffected by external factors and is a testament to the measures implemented by regulators and the leadership to retain Dubai’s attractiveness to investors and end-users. Last year we launched more than 20 projects, one of our most successful years, and this reflects our confidence in Dubai.”
Surging population growth fuels demand
With Dubai’s population forecast to hit 5.8 million by 2040, the city will need approximately 54,440 new homes annually to keep pace with demand – and that doesn’t even factor in the tourism growth.
Evans said: “Regardless of the number of launches we have witnessed through 2023 to date, the city’s population is still growing 300 percent faster. Soon, we will see four new mega projects by Emaar, Damac, and Majid Al Futtaim, which will address the unmet demand for villas and townhouses.”
“We must also consider the lapse in launch-to-handover, which is currently affecting the supply of ready homes and, in turn, increasing rental prices,” Evans added.
The numbers paint a vivid picture of the acute housing shortage.
“Even with the influx of new supply in the next three to five years, we are currently facing a severe undersupply of homes,” says Lomax. “If we consider the 2023 population of Dubai with buying power, and with an average household size of four, the housing units required now have a deficit of 190,439 homes.”
She added: “Properties due for handover in the next five years only amount to under 200,000. Demand will continue to grow each year and, based on the numbers, supply will not be able to catch up anytime soon.”
