Dubai’s real estate market recorded an impressive AED 232 billion ($63.2 billion) in residential sales during the second half of 2024, reflecting a 31% year-over-year (YOY) growth, according to a report by Espace Real Estate. However, experts predict a potential moderation in price growth for 2025 as supply catches up with demand.
Off-Plan Sales Dominate Market Growth
The report highlights the off-plan sector’s dominance, with 61,435 off-plan transactions (up 74% YOY) valued at AED 127 billion ($34.6 billion), marking a 51% YOY increase. The off-plan market accounted for 65% of total transactions, up from 61% in the first half of the year.
In contrast, the secondary market registered 32,487 transactions (up 15% YOY), reflecting the ongoing shift of renters transitioning into homeowners amid high demand and limited supply.
Price Increases Across Key Communities
Sales prices surged in 19 of 20 villa communities and 10 of 11 apartment communities tracked by Espace Real Estate. Notable increases include:
- Jumeirah Golf Estates: +35%
- Dubai Hills: +27%
- Jumeirah Islands: +26%
- Springs: +26%
Newer communities like Al Furjan also saw a 26% price increase as buyers sought value options. Meanwhile, apartment communities like Emaar Beachfront and Jumeirah Village Circle (JVC) experienced significant transaction growth at 34% and 28%, respectively, driven by ongoing expansions and project completions.
Population Growth Fuels Demand
Dubai’s population has grown by 65% in the last decade and 10% in the past three years, contributing to the sustained demand for real estate. Western European buyers, particularly from the UK, Netherlands, France, and Ireland, now make up a significant share of the market, drawn by Dubai’s lifestyle, safety, and investment returns.
John Lyons, Managing Director of Espace Real Estate, noted, “Dubai’s post-COVID appeal remains strong, especially among European buyers, positioning the city as a global wealth magnet.”
Outlook for 2025
While continued population growth and new developments are expected, the villa and townhouse market faces supply constraints, with only 5% of new projects comprising villas and 15% townhouses. This limited supply is likely to sustain price growth in these segments.
Lyons predicts, “Absorption rates may moderate as we move toward a balanced market. Prices will likely rise in 2025, but not at the same pace as 2024.”
