How is the property market forecast in The United Arab Emirates?

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A team specialized in real estate investing in MENA countries (Morocco, UAE, Oman, etc.)

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in the UAE. If you'd like to learn more about us, you can check our presentation page.

What's the current average price per square meter for residential property in Dubai, Abu Dhabi, and Sharjah, and how does that compare to five years ago?

As of September 2025, Dubai residential property averages AED 17,093 per square meter, representing the highest prices in the UAE market.

Abu Dhabi follows with AED 10,226 per square meter, while Sharjah maintains more affordable pricing at approximately AED 13,010 per square meter for median apartment properties. These current figures reflect significant appreciation across all three emirates since 2020.

The five-year comparison reveals dramatic growth trajectories, with Dubai experiencing the most substantial increases. Dubai property prices have surged approximately 90% from their post-pandemic lows in 2020, while Abu Dhabi has seen more moderate but steady growth of 30-40% over the same period. Sharjah has recorded the most conservative appreciation at 20-30%, maintaining its position as the most accessible market for entry-level investors.

This price evolution reflects the UAE's economic recovery and diversification efforts, supported by government initiatives, visa reforms, and infrastructure investments. Dubai's premium positioning continues to attract international buyers, while Abu Dhabi benefits from its status as the capital and major business hub.

It's something we develop in our UAE property pack.

How fast are residential and commercial property prices expected to grow annually over the next five years, in percentage terms?

UAE residential property prices are forecast to grow at 5-8% annually over the next five years, driven by sustained population growth and infrastructure development.

Commercial property prices are expected to appreciate at a slightly more moderate pace of 3-6% annually, reflecting different demand dynamics in the office and retail sectors. These growth rates position the UAE property market among the strongest performers in the Middle East region.

The residential growth projection is supported by the UAE's 3% annual population increase, continued foreign investment inflows, and government commitments to infrastructure spending exceeding AED 390 billion through 2035. Dubai's residential market is expected to lead growth rates, particularly in premium segments and emerging areas benefiting from new transport links.

Commercial property growth will be more selective, with Grade A office spaces in prime locations and mixed-use developments expected to outperform traditional retail and older office stock. The shift toward flexible working arrangements and e-commerce growth continues to reshape commercial real estate demand patterns across the emirates.

What is the current rental yield in major cities like Dubai Marina, Downtown Dubai, and Abu Dhabi Corniche, and how does this compare with other global property hubs?

Dubai Marina delivers rental yields of 6.4-7.2% gross annually, making it one of the highest-yielding premium residential areas in Dubai.

Downtown Dubai offers slightly lower but still attractive yields of 5.8-6.2%, while Abu Dhabi Corniche provides 5.1-5.8% annual returns. These yields significantly exceed most major global property markets, positioning the UAE as an attractive destination for income-focused investors.

When compared to international hubs, UAE rental yields demonstrate clear advantages. London typically delivers 3-4% gross yields, New York ranges between 2-4%, and Singapore averages 2-3%. Hong Kong and Tokyo often provide even lower returns at 2-3%, while European capitals like Paris and Frankfurt rarely exceed 4%.

This yield premium reflects the UAE's tax-free rental income environment, strong tenant demand from expatriate populations, and relatively affordable property prices compared to income levels. The combination of capital appreciation potential and superior rental returns makes UAE property particularly compelling for international investors seeking both growth and income.

How many new housing units and commercial spaces are scheduled for delivery in the next three years, and what percentage increase does that represent compared to existing stock?

The UAE property market expects delivery of over 95,000 new residential units across Dubai, Abu Dhabi, and Sharjah over the next three years.

Commercial space additions will exceed 3 million square feet during the same period, focusing on Grade A office developments, mixed-use projects, and retail components. These additions represent approximately 12-15% growth in residential housing stock and 6-8% expansion in commercial inventory.

This supply pipeline is carefully managed to avoid oversupply concerns, with developers focusing on specific demand segments and price points. The balanced approach between new supply and population growth should maintain market stability while providing opportunities across different investment categories.

What's the average occupancy rate in residential and office properties across the UAE right now, and how has that changed in the past two years?

UAE residential properties currently maintain occupancy rates of 86-91%, demonstrating strong tenant demand across all emirates.

Office properties achieve 78-83% occupancy rates as of September 2025, reflecting the ongoing adaptation to post-pandemic working patterns. Both sectors have shown consistent improvement over the past two years, with residential occupancy increasing 3-5 percentage points and office occupancy rising from 74-78% in early 2023.

The residential occupancy improvement reflects the UAE's successful population growth strategies, including the introduction of long-term visas, remote work programs, and family-friendly policies. Dubai leads residential occupancy at 89-91%, followed by Abu Dhabi at 87-90%, and Sharjah maintaining solid performance at 86-89%.

Office occupancy recovery has been more gradual but steady, with premium Grade A properties in central business districts achieving 85-90% occupancy while older or peripheral office stock averages 70-75%. The flight to quality trend continues to benefit newer developments with modern amenities and flexible layout options.

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How many property transactions (both sales and rentals) were recorded in 2024 in the UAE, and what's the year-on-year growth rate?

Dubai recorded over 140,500 property transactions in 2024, including both sales and rental agreements, marking exceptional market activity.

Abu Dhabi contributed 48,200+ transactions to the total UAE volume, while Sharjah and other emirates added approximately 35,000 transactions. The combined UAE market experienced 25% year-on-year growth in transaction volume and 33% growth in total transaction value compared to 2023.

This growth reflects renewed investor confidence, improved mortgage accessibility, and the UAE's continued attraction for international buyers. The sales-to-rental transaction ratio remained roughly 60:40, indicating healthy balance between investment purchases and end-user demand.

Transaction value growth outpacing volume growth demonstrates price appreciation across all property categories, with luxury and premium segments showing particularly strong performance. The sustained high activity levels suggest market maturity and depth, providing liquidity for both buyers and sellers across different price points.

What proportion of buyers are foreign investors versus local residents, and what are the top nationalities investing in the UAE property market?

Foreign investors dominate UAE property purchases, accounting for 68-72% of all buyers in Dubai and 55-60% in Abu Dhabi as of 2025.

The top investing nationalities include Indians leading with approximately 20% of foreign purchases, followed by Russians at 12-15%, Pakistanis at 8-10%, Chinese investors at 6-8%, and British buyers representing 5-7% of international transactions. This diverse investor base provides market stability and reduces dependency on any single source country.

Local Emirati and resident expatriate purchases make up the remaining market share, with UAE nationals particularly active in villa communities and large apartment investments. The high foreign investment percentage reflects the UAE's investor-friendly policies, including freehold ownership rights in designated areas and streamlined purchase procedures.

Recent visa policy changes, including the 10-year Golden Visa program and remote work permits, have further increased international investor interest. The diversity of buyer nationalities helps insulate the market from economic changes in any single country, contributing to overall market resilience and growth sustainability.

It's something we develop in our UAE property pack.

What is the current mortgage interest rate range in the UAE, and how do loan-to-value ratios compare with those in 2020?

UAE mortgage interest rates currently range from 4.75% to 6.0% for fixed-rate loans, representing a slight decrease from pandemic-period peaks in 2022-2023.

Loan-to-value ratios remain unchanged from 2020 levels, with UAE residents eligible for up to 80% financing and non-residents qualifying for 50-65% LTV depending on the lender and property type. These conservative lending standards have maintained market stability while ensuring accessibility for qualified buyers.

Variable rate mortgages are available from 4.5% to 5.5%, tracking UAE Central Bank rates plus lender margins. The relatively stable rate environment reflects the UAE dirham's peg to the US dollar and the Central Bank's prudent monetary policy approach.

Mortgage accessibility has improved through digital application processes and streamlined documentation requirements, while lending criteria remain appropriately stringent. The combination of competitive rates and established LTV limits supports sustainable market growth without encouraging excessive leverage or speculation.

How does the population growth forecast—currently around 3% annually—impact the expected demand for housing in the next five years?

The UAE's 3% annual population growth directly translates to housing demand for approximately 180,000-200,000 additional residents each year.

This population expansion requires roughly 60,000-70,000 new housing units annually, considering average household sizes and accommodation preferences. Over five years, this growth pattern will generate demand for 300,000-350,000 additional residential units across all emirates and property categories.

The population increase is driven by the UAE's economic diversification strategy, visa policy reforms, and successful positioning as a global business and lifestyle hub. New residents typically include skilled professionals, entrepreneurs, and families attracted by career opportunities, tax advantages, and quality of life benefits.

This sustained demographic growth provides fundamental support for property demand, rental market strength, and long-term price appreciation. The consistent population expansion helps justify new construction projects and provides confidence for both developers and investors in the residential property sector.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UAE versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What percentage of GDP is driven by real estate and construction in the UAE today, and how does that compare to ten years ago?

Real estate and construction currently contribute 13-15% of UAE GDP as of 2025, representing significant growth from approximately 9% a decade ago.

This increase reflects the sector's enhanced importance in the UAE's diversified economy, supported by government infrastructure initiatives, private development projects, and foreign investment attraction strategies. The construction component alone accounts for 6-8% of GDP, while real estate services and transactions contribute the remainder.

The sector's GDP contribution has grown consistently due to major developments including Expo 2020 legacy projects, new city developments, and ongoing infrastructure expansion. Government spending on transportation, utilities, and social infrastructure has stimulated both direct construction activity and related real estate development.

This elevated GDP contribution demonstrates real estate's role as a key economic driver, providing employment, attracting foreign capital, and supporting related industries including finance, professional services, and retail. The sustainable growth in this sector's economic importance reflects successful urban planning and development policies.

How much government and infrastructure spending is planned over the next decade, and how is this expected to support property demand?

The UAE government has committed over AED 390 billion in infrastructure and development spending for 2025-2035, creating substantial support for property market growth.

Key projects include Expo City Dubai expansion, new metro and transport lines, advanced manufacturing zones, and smart city initiatives across all emirates. This spending directly supports property demand by improving accessibility, creating employment opportunities, and enhancing the overall investment environment.

Major infrastructure investments include the Dubai Metro expansion (AED 18 billion), Abu Dhabi transport network upgrades (AED 25 billion), and new free zone developments (AED 35 billion). These projects improve connectivity between residential areas and business districts, making previously peripheral locations more attractive for development and investment.

The infrastructure spending creates multiplier effects throughout the economy, generating employment, attracting business investment, and increasing population growth rates. Each AED 1 billion in infrastructure spending typically supports 3,000-4,000 jobs and generates additional housing demand for 8,000-10,000 residents including families.

It's something we develop in our UAE property pack.

What are the vacancy rates for premium versus mid-market properties, and how do those numbers shape the investment outlook for different property segments?

Premium properties across the UAE maintain vacancy rates of 4-7%, significantly lower than mid-market properties which average 10-12% vacancy rates.

This disparity reflects strong demand for high-quality accommodations from affluent expatriates, business executives, and wealthy residents who prioritize location, amenities, and build quality over cost considerations. Premium properties in prime locations like Dubai Marina, Downtown Dubai, and Abu Dhabi Corniche consistently achieve the lowest vacancy rates.

The lower vacancy rates in premium segments indicate better investment security, more predictable cash flows, and stronger tenant retention. Premium properties also demonstrate superior resilience during economic downturns and achieve faster rental growth during market upswings, making them attractive for long-term investment strategies focused on both income generation and capital appreciation.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Khaleej Times - Dubai Property Prices
2. Arabian Business - Abu Dhabi Property Report
3. Properstar - Sharjah House Prices
4. Prelaunch.ae - Sharjah Property Guide
5. Bayut - Abu Dhabi Market Report
6. Global Property Guide - UAE Price History
7. DXB Interact - Dubai Market Data
8. Driven Properties - Dubai Housing Prices