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What will happen in the UAE’s real estate market? Will prices go up or down? Is Dubai still a hotspot for foreign investors? How is the UAE government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who buy properties in the UAE, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
How this content was created 🔎📝
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Jean-Charles Salvin 🇫🇷
Co-Founder, Best Dubai Condos
1) Foreign investment in Abu Dhabi's residential real estate will grow because of its stable economy and strategic location
Abu Dhabi is quickly becoming a prime spot for foreign investment in residential real estate.
In the first half of 2024, the emirate saw a 225% increase in foreign direct investment in its real estate sector compared to the same period in 2023. This surge shows that international investors are increasingly recognizing the potential of Abu Dhabi's property market. The emirate's stable economy is a major draw. In 2024, Abu Dhabi's GDP hit a record AED297 billion, reflecting strong economic growth. The non-oil economy grew by 5.7% in the first half of 2024, highlighting the emirate's efforts to diversify beyond oil, which is a big plus for investors seeking stable and profitable opportunities.
Abu Dhabi's strategic location is another reason for the influx of foreign investors. The emirate is heavily investing in infrastructure projects like the Etihad Rail network and the expansion of the Al Saada Bridge. These projects enhance connectivity, making it easier for people and goods to move around, which is a significant advantage for investors. Additionally, housing prices in Abu Dhabi are about 30% lower than in Dubai, offering more affordable entry points for those looking to invest.
For those considering a move, Abu Dhabi's real estate market offers a unique blend of stability and opportunity. The emirate's commitment to diversifying its economy and improving infrastructure makes it an attractive destination for foreign investors. With its strategic location and competitive housing prices, Abu Dhabi is poised to become a major player in the global real estate market.
Sources: Rise Expo, Moydom, Oxford Business Group, Media Office Abu Dhabi
2) More foreign investors will focus on Dubai's off-plan properties for investment and potential capital gains
Dubai is increasingly becoming a prime spot for foreign buyers interested in off-plan properties.
In 2023, there was a 48% rise in off-plan property transactions, and this momentum carried into 2024, with property deals reaching a total value of AED 177.4 billion in just the first half of the year. This surge is attracting more foreign investors, who are drawn by the potential for capital appreciation.
Foreign direct investment in the UAE saw a boost, hitting $30.69 billion in 2023, thanks to policies like allowing 100% foreign ownership of companies outside free zones. This makes Dubai a magnet for international investors looking for lucrative opportunities.
Residential property values in Dubai have shown strong growth, with a 21.3% year-on-year increase in the second quarter of 2024. The luxury segment is particularly hot, with a 35% increase in transaction volume during the same period, highlighting the demand for high-end real estate.
Investors are also eyeing Dubai for its rental yields, which reached an average gross yield of 5.16% in early 2024. This is a jump from the previous year, making it an attractive market for those seeking solid returns.
Dubai's population is on the rise, expected to surpass 4 million by 2025, fueled by expatriates and government efforts to attract talent. The Dubai Economic Agenda (D33) aims to double foreign trade and establish Dubai as a leading financial hub by 2033, further boosting the real estate market.
Infrastructure projects in areas like Dubai South and Jumeirah Village Circle are set to increase property demand and value. These developments, along with Dubai's top international rankings as a real estate investment destination, are enhancing investor confidence.
Sources: Magellan, Finance Monthly, Knight Frank, Unique Properties
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.
3) UAE property prices will stabilize as the market shifts to sustainable growth
The UAE's residential property market is steadily moving towards stabilization.
One big reason for this is the rising supply of new homes. In 2024, over 6,500 units were delivered just in the first quarter, and more are expected through 2025 and 2026. This influx helps balance the market by meeting the growing demand from both locals and expatriates looking for a place to call home.
The government is also playing a crucial role by regulating the real estate market. New laws and amendments have been introduced to create a more stable environment for property transactions. Programs like the "Golden Visa" have attracted more stable expatriate residents, encouraging long-term investment in the property market.
Dubai's property prices have a history of following cyclical patterns. After periods of rapid growth, the market naturally adjusts to a more sustainable pace. This is not just a trend but a pattern that has been observed over the years, making it a reliable indicator of future market behavior.
Foreign investment is another factor contributing to this stability. Increased foreign interest, coupled with strategic government initiatives, has created a more balanced demand-supply dynamic. This balance is crucial for maintaining a stable market environment.
Overall, these elements are working together to ensure that the UAE's residential property prices will stabilize as the market adjusts to a more sustainable growth rate.
Sources: S&P Global, CBRE, Cielo DXB, MarkNtel Advisors, Unique Properties
4) More foreign buyers will invest in Sharjah for affordable properties with strong rental returns
Sharjah is quickly becoming a top choice for foreign buyers looking for affordable investments with strong rental returns.
In 2023, foreign investments in Sharjah hit a record AED 5.9 billion, drawing interest from diverse nationalities like Emiratis, Indians, and Pakistanis. The emirate's property prices are notably lower than in Dubai and Abu Dhabi, making it a smart pick for investors who want to get more for their money. The local government is also keen on attracting foreign investment, with plans to quadruple its foreign direct investment to $10 billion over the next five years.
Sharjah's introduction of long-term residency visas for property investors has added to its appeal. This move offers a stable and secure environment for long-term investments, making more foreign buyers consider Sharjah as a viable option. The growing expatriate population ensures a steady demand for rental properties, which means high occupancy rates and strong rental returns.
For those eyeing the UAE market, Sharjah stands out as a place where you can invest without breaking the bank. The emirate's proactive approach in attracting foreign investment is evident in its ambitious plans to boost foreign direct investment significantly. This makes it a promising destination for those looking to invest in real estate.
With its affordable property prices and government initiatives, Sharjah is positioning itself as a hotspot for foreign investors. The emirate's focus on creating a welcoming environment for investors is paying off, as seen in the record-breaking foreign investments in 2023.
Sources: Top Luxury Property, Finance Monthly, AGBI
5) Sharjah's rental yields will stay appealing because it's affordable and close to Dubai
Sharjah is a hotspot for renters because of its affordable housing and proximity to Dubai.
People are flocking to Sharjah for its impressive rental yields. In the city center, landlords enjoy yields of about 7.98%, which is much better than Dubai's 6.05%. This makes Sharjah a smart choice for property investors looking for good returns.
Commuting between Sharjah and Dubai is becoming more common, thanks to improved infrastructure and transportation. This ease of travel means more people are choosing to live in Sharjah while working in Dubai, increasing the demand for rentals.
Market reports consistently show that Sharjah is more affordable than Dubai. Lower property prices combined with high rental yields make it a great spot for both investors and renters, keeping its rental market strong.
Sharjah's affordability and strategic location near Dubai are key reasons why its rental yields remain attractive. The emirate offers a unique blend of cost-effectiveness and convenience, drawing in those who seek a balance between quality of life and financial prudence.
Sources: Top Luxury Property, Numbeo, Keyspace Realty
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6) Rental yields in Ajman will rise as more people look for affordable housing options
Ajman's rental market is on the rise, with rental transaction values jumping by 49% to AED 2.277 billion in early 2024.
With a population now over 500,000, Ajman is becoming a popular choice for those seeking affordable living, thanks to its strategic location and lower costs compared to Dubai and Abu Dhabi. This growth is fueling the demand for rental properties, as people are drawn to the emirate's budget-friendly options.
Ajman's rent prices are significantly lower than those in Dubai and Abu Dhabi, making it an attractive alternative for residents looking to save on housing costs. This affordability is a major draw for many, especially as living expenses continue to rise in other parts of the UAE.
The Ajman government is playing a crucial role by implementing supportive policies and investing in infrastructure. These efforts are enhancing the city's facilities and services, making it an increasingly appealing place to live and invest.
New residential projects are popping up, specifically targeting middle-income residents. This focus on affordable housing is a direct response to the growing demand for budget-friendly options, ensuring that Ajman remains a viable choice for many.
As more people seek out affordable living, Ajman's rental yields are expected to continue climbing, driven by its appeal as a residential and investment hotspot.
Sources: Bayut, Homes Go Fast, Homeland, Jobx Dubai Blog
7) Abu Dhabi’s property prices will grow moderately due to government investments in infrastructure and tourism
Abu Dhabi's residential property market is on the rise, thanks to strategic government investments.
In 2024, the government poured AED 66 billion into transport and urban projects, enhancing the city's connectivity and amenities. This makes Abu Dhabi more appealing to both residents and investors, creating a vibrant urban environment. The city's infrastructure improvements are not just about roads and bridges; they include parks, public spaces, and community facilities that enrich daily life.
Tourism is another driving force behind the property market's growth. With the Tourism Strategy 2030, Abu Dhabi aims to boost its GDP and attract more visitors. New attractions, like the Harry Potter experience at Yas Island, are set to draw crowds, increasing the demand for residential properties. This strategy is not just about entertainment; it's about creating a cultural hub that appeals to a global audience.
The numbers speak for themselves. In 2023, Abu Dhabi saw a 27% increase in hotel guests and a 44% rise in MICE activities (Meetings, Incentives, Conferences, and Exhibitions). This surge in tourism suggests a growing interest in the city, with more people looking to invest in or rent properties. The influx of visitors is a testament to Abu Dhabi's appeal as a dynamic and evolving city.
As the city continues to develop, the residential property market is expected to see moderate growth. The combination of government spending and tourism development is creating a perfect storm for property investors. With new infrastructure and attractions, Abu Dhabi is positioning itself as a top destination for both living and leisure.
Sources: Top Luxury Property, Skift
8) Demand for affordable family housing in Sharjah will grow as more expats look for cost-effective living options
Sharjah is becoming a hot spot for expatriates seeking affordable family housing.
With the UAE's expatriate population reaching 12.50 million in 2024, many are looking for cost-effective living options. People from countries like Pakistan, Bangladesh, and the Philippines are particularly drawn to Sharjah. The rising cost of living in nearby cities like Dubai and Abu Dhabi is a big factor. For example, monthly expenses for a single person in Dubai jumped to AED4,064.9 in 2024, while a family of four now spends AED14,198.6. This has led many to explore more budget-friendly alternatives.
Sharjah stands out with property prices that are about 40% lower than in Dubai. You can find apartments ranging from AED 500,000 to AED 1.5 million, making it a more attractive option for families. The government is also stepping up by improving infrastructure and amenities, which adds to Sharjah's appeal.
Sources: Global Media Insight, Economy Middle East, Business Standard
We have made this infographic to give you a quick and clear snapshot of the property market in the UAE. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) High-end property prices in Dubai will keep rising due to low supply and growing international demand
Dubai's luxury property prices are climbing, and this trend isn't slowing down.
One big reason is the limited supply of high-end homes. In 2024, the number of available properties in Dubai's prime areas dropped by 47%. This shows just how much people want to live in these exclusive spots.
International buyers are also showing more interest. In the first half of 2024, luxury sales over AED 10 million jumped by 47% from the previous year. High-net-worth individuals from Europe and Asia are especially keen on places like Palm Jumeirah and Downtown Dubai.
Dubai's government is making moves to attract foreign investors. Policies like the golden visa scheme and allowing 100% foreign ownership of businesses are making Dubai even more appealing. These efforts, along with Dubai's reputation as a safe and attractive place to invest, are drawing wealthy expatriates and foreign buyers.
Dubai is known for its vibrant lifestyle and tax-free environment, which adds to its allure. The city offers a unique blend of modernity and tradition, making it a top choice for those looking to invest in luxury real estate.
Sources: Unique Properties, The Luxury Playbook, Hindustan Times
10) Demand for pet-friendly homes will grow as more people adopt pets
Pet ownership in the UAE has surged in recent years, especially among young singles and seniors.
With over 1.5 million pet owners and more than 2 million pets, cats and dogs have become beloved companions in many households. This growing trend is reshaping the housing market, as more people are looking for places that welcome their furry friends. In fact, a survey found that 63% of renters in the UAE now consider "pet-friendliness" a key factor when choosing a home.
Real estate developers are catching on, creating communities that cater to pet owners. For instance, Jumeirah Village Circle and Damac Hills 2 are popular areas designed with amenities like dog parks and pet shops. These features make life easier for pet owners and are becoming a major selling point for properties.
Real estate agents are noticing this shift too. They report a growing number of clients specifically seeking out pet-friendly properties. This demand is not just a passing trend; it's a significant change in what people prioritize when looking for a home.
As more families and individuals adopt pets, the need for pet-friendly residences will only continue to rise. This is creating opportunities for developers and landlords to tap into a market that values pet inclusivity.
Communities that embrace this trend are likely to see increased interest from potential buyers and renters. It's a win-win situation, offering a better quality of life for pet owners and a lucrative opportunity for the real estate market.
Sources: GlobalPETS, Property Finder, NAH
11) Communities focused on health and wellness will become more popular as people prioritize well-being and lifestyle
In the UAE, there's been a noticeable shift towards wellness-focused living environments.
Back in 2023 and 2024, the demand for these wellness-oriented communities was on the rise, making up nearly 10% of the total residential real estate market. This trend was especially strong in Dubai, where 60% of homebuyers sought homes with wellness features. People were looking for more than just luxury; they wanted spaces that supported a healthier lifestyle.
The fitness and wellness industry in the UAE has been booming, with the market projected to grow from $2.75 billion in 2020 to $3.7 billion by 2025. This surge was fueled by a growing awareness of health and fitness, a trend that the pandemic only accelerated. As a result, there was a noticeable increase in demand for living environments that prioritized wellness, including the rise of female-only fitness centers and the popularity of online fitness apps.
Developers in Dubai have been quick to catch on, incorporating green spaces and recreational facilities into their projects. Parks, landscaped areas, and cycling paths are becoming standard features, encouraging residents to engage with nature and stay active. This shift is not just about aesthetics; it's about creating environments that promote a healthier lifestyle.
Moreover, the introduction of wellness certifications for residential projects has highlighted the growing importance of wellness in real estate. These certifications make properties more appealing to health-conscious buyers, who are increasingly prioritizing well-being in their living spaces.
As residents continue to prioritize well-being and lifestyle, health and wellness-focused communities are becoming more desirable. This trend is reshaping the real estate market, particularly in places like Dubai, where the demand for such communities is strong and growing.
Sources: The Rise of Wellness-Oriented Communities: Dubai's Latest Real Estate Trend, Health and Wellness UAE Market 2024, Wellness Communities & Real Estate Initiative 2024 Trends
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12) Demand for spacious villas with private outdoor areas will grow as families seek more space and privacy
The UAE's population has grown significantly, reaching 12.50 million in 2024.
Many families are moving to the UAE for work or lifestyle changes, which means there's a higher demand for homes that suit family needs. In Dubai, 40% of home seekers want large villas, especially those with three or more bedrooms. This is because people are eager to invest in spacious homes for the long term. To meet this demand, the city plans to deliver about 10,000 villas and townhouses in 2024, with an increase to 12,000 units in 2025.
Remote work has changed what people want in a home. Now, home offices and outdoor areas are more desirable as people look for a better work-life balance. Spacious living is not just a trend; it's being highlighted in the media for its benefits, like improved mental health and well-being.
There's also a big interest in outdoor activities and home gardening. In 2023, there were over 52,000 searches for pet-friendly communities. This shows that people want villas with private gardens or pools. Urban congestion is making people look for more space, pushing them towards suburban or rural properties.
Families are prioritizing space and privacy, which is why the demand for spacious villas with private outdoor areas is on the rise. This trend is expected to continue as more people seek homes that offer both comfort and privacy.
Sources: Dubai Chronicle, Global Media Insight, Navani Properties
13) Demand for permanent homes in the UAE will rise as more expatriates settle long-term
The UAE's population has surged to 12.50 million in 2024, with Abu Dhabi leading the growth.
This boom is largely due to the expatriate community, which now makes up a staggering 11.06 million of the total population. The Golden Visa program, launched in 2019, plays a big role in this trend. It offers long-term residency to foreign talents, including investors and entrepreneurs, with perks like a renewable residence visa and the freedom to travel without losing residency.
Many expatriates, especially those with Golden Visas, are keen on making the UAE their permanent home. This is evident from the rising demand for international schools and family-friendly amenities, showing that families are eager to settle down for the long haul.
In Abu Dhabi, the real estate market is buzzing with activity as more expatriates look for permanent residences. The city offers a blend of modern living and cultural richness, making it an attractive choice for those seeking a balanced lifestyle.
Dubai, too, is seeing a spike in property interest, thanks to its vibrant economy and cosmopolitan appeal. The Golden Visa has made it easier for expatriates to invest in property, knowing they have a secure future in the UAE.
With the UAE's strategic location and business-friendly environment, it's no wonder that more expatriates are choosing to call it home. The country's commitment to innovation and development continues to draw people from all over the world.
Sources: Global Media Insight, Middle East Briefing, Gulf Business
14) Demand for flexible living and co-living spaces will grow as more digital nomads move in
The UAE is becoming a hotspot for digital nomads thanks to its appealing visa program.
Ranked fourth in the VisaGuide’s Digital Nomad Index, the UAE is a top choice for remote workers. This ranking has led to a noticeable increase in digital nomads choosing to live and work in the UAE, especially in 2023 and 2024. The country’s attractive digital nomad visa program is a major draw, making it a preferred destination for those seeking a flexible lifestyle.
With more digital nomads arriving, there's a rising demand for flexible living spaces and co-living arrangements. Major cities like Dubai and Abu Dhabi are responding by developing more co-living spaces. These spaces are designed to meet the needs of expatriates and digital nomads who want flexible living options. Real estate listings are increasingly highlighting flexible lease terms, catering to the preferences of this new wave of residents.
Surveys and testimonials from digital nomads highlight their preference for flexible living arrangements. A survey by Booking.com found that many guests prefer properties with sustainability practices, which often include flexible living options. This aligns with the lifestyle of digital nomads, who value the ability to move and adapt easily.
The rise in coworking spaces in the UAE complements this trend, providing digital nomads with the necessary work environments that match their flexible living needs. These spaces are popping up all over, offering a variety of options for those who need a place to work that fits their on-the-go lifestyle.
Sources: VisaGuide, Economy Middle East, Short Term Rentalz
We made this infographic to show you how property prices in the UAE compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Demand for senior-friendly housing in the UAE will grow as the population ages
The UAE's aging population is opening up a niche market for senior-friendly housing.
With people living longer due to better healthcare and living conditions, there's a growing need for homes that cater to older adults. Since 2023, the number of residents aged 60 and above has been on the rise, and those over 65 now make up nearly 2% of the population. This shift is pushing the demand for housing solutions that meet seniors' needs.
The UAE government is on board, rolling out policies like the National Policy for Senior Citizens and the Dubai Retiree Projects Support programme. These initiatives are designed to support the aging demographic and ensure they have suitable living options.
Healthcare spending is also set to increase, with a big focus on elderly care. This reflects the growing importance of providing adequate healthcare services for the aging population. The senior housing industry is buzzing, with a 40% increase in the absorption rate in early 2024, showing strong interest in retirement communities.
For potential property buyers, this means there's a unique opportunity to invest in a market that's only going to grow. The demand for senior-friendly housing is not just a trend; it's a necessity driven by demographic changes and government support.
As the UAE continues to evolve, the need for senior-friendly communities will only become more pronounced, making it a smart move for those looking to invest in real estate. The combination of an aging population and supportive policies creates a fertile ground for growth in this sector.
Sources: UAE Population Statistics 2024, Senior Citizens Rights in the UAE, Zawya, NIC MAP Vision
16) Ras Al Khaimah will attract foreign retirees looking for a peaceful lifestyle and affordable housing
Ras Al Khaimah is quickly becoming a favorite spot for retirees seeking a peaceful lifestyle and affordable housing.
In 2024, it was ranked second globally for affordable housing, with a remarkable 72% of expats finding it easy to secure accommodation. This is a stark contrast to the global average of 45%, highlighting how accessible and budget-friendly housing is in RAK. Such affordability makes it a magnet for retirees looking for a comfortable place to settle down.
The real estate market in Ras Al Khaimah is on the rise, with significant growth expected in 2025. This boom includes a mix of residential and commercial properties, enhancing its allure for those in their golden years. The UAE's Ras Al Khaimah has also rolled out an affordable investor residency program, which features a residency by investment visa. By setting up a company with an investment of just AED16,500 (around $4,923), retirees can easily secure long-term residency.
Healthcare is a top priority for retirees, and Ras Al Khaimah doesn't disappoint. The region boasts a well-developed healthcare system, with several hospitals and primary health centers. Facilities like Sheikh Saqr Hospital and Ibrahim Bin Hamad Obaidallah Hospital offer a range of medical specialties, including geriatric care, ensuring retirees have access to high-quality medical services.
With its serene environment, affordable living, and robust healthcare, Ras Al Khaimah is poised to become a preferred destination for retirees. The combination of these factors makes it an ideal place for those looking to enjoy their retirement years in comfort and peace.
Sources: Harf.ae, Top Luxury Property, Uglobal
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.