With no signs of slowing down, the real estate market in Dubai is still outperforming global hotspots like New York, London, and Hong Kong. Experts predict that rents and property prices in the emirate will continue to rise in 2025, with the recent record rainfall and subsequent flooding having only a “minimal” effect on the market. Read this also: Dubai Real Estate: Mortgage vs. Home Loan Which Financing Option for Properties Is Better? Expert Opinions Experts told Al Arabiya English that despite global economic changes, property prices in the emirate are expected to rise by an additional five to seven percent yearly in 2024 and 2025 due to soaring demand that greatly exceeds supply. According to Aran Lomax, managing partner of TREO houses, “Dubai’s property market has demonstrated resilience and continued growth despite occasional fluctuations.” “Dubai’s real estate market is growing at an unstoppable rate because to government development projects and rising demand brought on by a large influx of new residents. Read this also: Dubai and Abu Dhabi’s retail rentals are rising by double digits. “In fact, according to data from 2023, Dubai surpasses well-known real estate hotspots like New York, London, and Hong Kong to rank first for the most number of homes sold for over $10 million.” Floods will “minimally impact prices.” The recent floods in the United Arab Emirates, which left some properties underwater and many more suffering from water damage, are not expected to stop demand for real estate, according to Zarah Evans, owner and managing partner of Exclusive Links Real Estate Broker. Read this also: Mohamed Alabbar, the founder of Emaar, reveals plans for The Music, Color, and Fire Plaza at Dubai Square in Dubai Creek Harbour. “In the immediate months that follow, there may be a decline in interest in some of the communities that were hardest hit by the recent floods in Dubai,” she said to Al Arabiya English. “Dubai responds positively to challenges very quickly, as demonstrated right after the rains.” She went on: “Developers were stepping in and offering residents free repairs on any damage, and the government was announcing upgrades to the drainage system.” Dubai, as a wider society, comes together and is resilient in times like this, and any price modifications will quickly be reversed. Read this also: A developer in the UAE’s Al Wasl neighborhood reports a record-breaking sale of villas. Opportunities and affordability: The outstanding value Dubai provides customers with in comparison to other international locations is one of its main advantages. Lomax observes, “You get so much more for so much less in Dubai.” “In Dubai, one million dollars can purchase 980 square feet, whereas in London, New York, Los Angeles, Singapore, and Sydney, the same amount can only purchase 355 square feet, 366 square feet, and 409 square feet.” However, there are other factors that draw in both inhabitants and investors to large properties. Dubai stands out for its advantageous position, welcoming policies for businesses, diversity, and safety. “Nowhere else in the world do you get the lifestyle, diversity, and opportunities that Dubai offers, and enjoy this much safety and convenience,” claims Lomax. Read this also: Dubai’s housing boom in 2024: tens of thousands of homes will be available, and prices will soar While it is impossible to anticipate anything with confidence, practically all fundamental economic indicators seem to imply a good growth rate for the real estate sector in the region, according to Hussain Sajwani, the founder and chairman of DAMAC, in an interview with Al Arabiya English. He continued, “We have seen a sustained rise in demand and robust transaction levels across all key developments in the market.” This is evidence of the steps taken by authorities and the leadership to keep Dubai appealing to investors and end users, as it has remained mainly unaffected by outside forces. We launched more than 20 projects last year—one of our most prosperous years—which shows our faith in Dubai. Rapid population expansion increases need By 2040, Dubai’s population is expected to reach 5.8 million, meaning that, even without accounting for the expansion in tourism, the city will need to build some 54,440 additional residences a year to meet demand. Read this also: Ras Al Khaimah has introduced Raha, a new island getaway, as the real estate boom continues. “The city’s population is still growing 300 percent faster, regardless of the number of launches we have witnessed through 2023 to date,” Evans stated. To meet the unmet demand for villas and townhouses, Emaar, Damac, and Majid Al Futtaim will soon unveil four new megaprojects. Evans continued, “We also need to take into account the launch-to-handover delay, which is now impacting the supply of ready homes and, consequently, driving up rental costs. The stark housing scarcity is depicted in graphic detail by the data. “We are currently facing a severe undersupply of homes, even with the influx of new supply in the next three to five years,” claims Lomax. “There is now a 190,439 home shortage in the number of housing units needed if we take into account the buying power of Dubai’s population in 2023 and an average household size of four.” Read this also: A property in the Burj Khalifa area sold for a record-breaking Dh139 million. “Just under 200,000 properties are due for handover in the next five years,” she continued. The data indicate that supply will not be able to keep up with the annual growth in demand.
