Dubai’s real estate surged into 2025 on the back of a record-breaking 2024 inspite of global economic challenges. In 2024 Dubai recorded 226,000 real estate transactions worth AED 761 billion, a 20% year-on-year jump in value [1] and residential property prices increased nearly 20% in 2024 [2].
At the same time, US protectionist trade measures, global trade wars and higher interest rates have strengthened the dollar – macro shifts that are rippling into the UAE via tighter credit controls and costlier financing. Overall, Dubai’s property sector remains resilient, with robust residential growth and notable expansion in commercial and industrial segments as it navigates global headwinds.
Booming Residential Sector and New Supply Pipeline
Dubai’s residential market continues to be the star performer. Transaction volumes hit all-time highs in 2024 and home values climbed around 20% Y-o-Y [2], outpacing many global markets. This momentum has carried into 2025, fueled by population growth, foreign investor inflows, and government initiatives (golden visas programs, tech / AI investments, infrastructure projects) that bolster end-user and expatriate demand. Dubai’s population increased by over 169,000 residents to reach approximately 3.825 million by the end of the year [11].
To meet this appetite, developers have launched a wave of projects:
- 1,034 projects are currently under construction in Dubai, comprising of around 288,000 new units in the pipeline [3].
- An estimated 41,800 residential units are set for completion in 2025, the most ever delivered in a single year [4]. A further 48,400 units are expected in 2026 totalling over 90,000 property handovers in the next 2 years [4].
Despite this influx of new homes, market absorption so far appears healthy – 2023 saw over 101,000 units launched for sale, a record high and those were largely purchased [4]. Industry experts note that Dubai’s real estate is keeping up with demand, however the wave of new supply should be watched carefully in 2025–2026 to ensure the market remains balanced.
Commercial and Industrial Sectors Gaining Ground
While residential leads the headlines, commercial and industrial real estate in Dubai is also on an upswing. In 2024 the commercial property sector (offices, retail, warehouses) logged 9,038 sales transactions (+24% YoY), totaling AED 90.1 billion [5]. Commercial properties saw an 85% leap in average transaction price (to AED 3.8M) as businesses reloacted to Dubai, expanded and upgraded space [5]. Warehouse / industrial properties likewise rose approximately 20% on average [5].
Industrial rents climbed around 13% YoY in 2024 amidst high occupancy in key free zones (JAFZA, DMCC, DIFC, RAKEZ) [6]. Dubai’s logistics sectors are growing as companies reconfigure supply chains in response to global trade tensions and protectionist tariffs, with many choosing Dubai as a key distribution hub for warehouses and fulfillment centers.
Macroeconomic Shifts: USD Strength, Rates and Capital Flows
All this being said, Dubai does not exist in a vacuum. Rising U.S. interest rates and a strong dollar have direct effects on the UAE due to the Dirham’s USD peg. A strong U.S. dollar equals a strong Dirham which makes Dubai property more expensive for buyers from weaker-currency countries [8]. This did have an impact on some European and South Asian investors over 2023–24 [8]. However, dollar-pegged stability can also attract capital from investors in the US, GCC, and other dollar-denominated nations [8].
The recent liberation day U.S. tariffs are creating global uncertainty that could dampen capital flows to emerging markets like the UAE, even if the direct impact on trade volumes remains limited. While the UAE maintains relatively low tariffs at 10% and has a diversified economy, the broader implications of U.S. protectionist policies—such as sluggish global growth and trade, tighter financing conditions, and investor caution—could affect sentiment and liquidity. Experts suggest that while the UAE is better positioned than many peers due to its strong infrastructure and healthy relations with the U.S., prolonged tariff disputes may reduce the appetite for cross-border investment, especially into sectors like real estate, which are illiquid. [9].
Dubai South and Al Maktoum Airport
One of the most dynamic areas to watch is Dubai South, the sprawling district around the upcoming Al Maktoum International Airport. This community is among the top three areas for future housing supply, with nearly 17,925 units in the pipeline – trailing only JVC and Business Bay [4].
The Al Maktoum International Airport expansion is a AED 128 billion ($35 billion) mega project aimed at ultimately hosting 5 runways, 4 terminals, and 260 million passengers per year [10]. The first phase is expected to be completed around 2033–2034, enabling around 150 million passengers per year [10].
Because of this, property prices in Dubai South jumped ~10–15% in 2024 [10] and market analysts predict demand for over 100,000 properties in Dubai South and vicinity over the coming decade [10].
Conclusion
Looking ahead, Dubai’s real estate market faces a balancing act. Local fundamentals are strong, and big-ticket projects like the Maktoum airport, the Dubai Loop and Golden Visa programs continue to draw investors and end-users.
However, external pressures persist. U.S. protectionist policies and high interest rates may result in a persistently strong dollar and costlier mortgages and elevated bond yields might swing capital flows. If the Fed begins cutting rates later in the year, as many expect, mortgage costs in the UAE would ease slightly and investor appetite should rebound.
In summary, Dubai’s real estate sector in 2025 is charting a growth path amid global uncertainty. Residential demand remains strong, commercial and industrial segments are expanding, and new zones like Dubai South are transforming the skyline. While global risks remain, Dubai’s status as a regional hub and investment magnet appears intact for the foreseable future.
As always, keep checking Viewit for the latest in-depth analysis on Dubai’s growth in the global context!
Sources
- https://www.wam.ae/en/article/bhvuhsc-dubai%E2%80%99s-real-estate-sector-records-aed761-billion
- https://www.knightfrank.com/research/article/2024-11-23-dubai-residential-property-market-2024-review
- https://www.zawya.com/en/press-release/research-and-studies/dubai-real-estate-growth-set-to-deliver-90-000-new-homes-in-next-two-years-ds9f2se3
- https://www.zawya.com/en/press-release/research-and-studies/dubai-real-estate-growth-set-to-deliver-90-000-new-homes-in-next-two-years-ds9f2se3
- https://www.arabianbusiness.com/industries/real-estate/dubai-commercial-property-market-records-24-jump-in-growth-rakes-in-24-5bn-in-value-in-2024
- https://www.cushwake.ae/news/dubais-warehousing-and-industrial-rental-rates-surge-13-yoy
- https://www.thenationalnews.com/business/money/2025/03/20/fed-rate-cut-uae-mortgages/
- https://dxbinteract.com/news/dubai-real-estate-market-global-concerns-stock-market-slips
- https://www.khaleejtimes.com/uae/trump-tariffs-uae-impact-minimal
- https://www.thenationalnews.com/uae/transport/2024/04/30/new-dubai-airport-al-maktoum-expansion-details-and-timeline
- https://whatson.ae/2025/01/dubai-records-highest-increase-in-population-in-6-years/?utm_source=chatgpt.com