Soaring population increases Dubai real estate demand
Housing demand reached unprecedented levels, said Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat.
By the end of March 2025, Dubai's population had risen to 3.92m, with 89,695 new residents added in just the first three months of the year, an average of approximately 1,000 people per day.
Dubai real estate demand
For perspective, the entire net population increase for 2024 was 170,478 people, averaging less than 500 per day.
The estimated number of new homes expected to be delivered this year stands at 61,580 units. Of these, 19 per cent, nearly 12,000 apartments and villas, were completed in the first quarter alone.
This is not unexpected, said ValuStrat, considering that just over half of last year's projected deliveries were ultimately handed over.
Securing an affordable home to buy or rent is becoming more difficult. According to the ValuStrat Price Index (VPI), which tracks the residential market, there has been consistent annual growth in capital values across all segments.
Apartment prices have risen by 21.4 per cent, while villa prices have increased by 30.3 per cent.
Rental rates have also surged, with villa rents up by 5.1 per cent and apartment rents rising by 10 per cent.
Demand for office space in Dubai remained strong, driven by sustained economic growth and business expansion.
The VPI tracking the office sector showed an impressive 29.1 per cent annual increase in capital values and a 20.2 per cent increase in asking rents.
The hospitality and industrial sectors also sustained positive growth.
Haider Tuaima said the only downside this quarter was the decline in residential sales, both off-plan and ready properties, as well as a decrease in mortgage applications, though this is only when compared to the previous quarter.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
23-07-2025
- Zawya
ValuStrat's latest report: Dubai residential sales surge with moderating price growth and increasing affordability pressures
The latest Dubai 2nd quarter real estate review report from ValuStrat, a globally recognised consultancy specialising in multi-sector advisory services, has revealed insightful dynamics in Dubai's real estate market. The report comprehensively analyses the residential, commercial, and hospitality sectors and underscores a market showing robust growth and market activity. Haider Tuaima, Managing Director and Head of Real Estate Research, shares his synopsis of Dubai's real estate market. According to him, there is a deceleration in price growth and growing affordability pressures. The quarter marked a significant milestone with nearly 37,000 off-plan transactions, averaging over AED 3.1 million per unit. Ready home sales also saw a 10.4% quarterly increase, driven by robust activity in April and May, reaching a record 13,700 title deed registrations, with an average price of AED 2.7 million. The estimated number of new homes scheduled for delivery in 2025 has been revised to 66,596 units. The first half of the year saw approximately 17,500 homes completed, equivalent to less than a third of the annual forecast. According to the ValuStrat Price Index (VPI), capital values in Dubai's freehold residential market continued to grow, though at a slower pace compared to 2024. Apartment prices rose by 19.1% YoY, while villa prices increased by 28.7%. This marks a slowdown compared to the same period last year, when apartment prices had risen by 23.4% and villa prices by 33.4%. Rental growth also moderated, with villa rents up 4.8% and apartment rents up 7.2% annually. Demand for office space remained strong, supported by sustained economic growth and business expansion. Office capital values grew 4.9% QoQ and 23.7% YoY, compared to 31.7% annual growth in 2024. In the industrial segment, logistics warehouses led performance, with 16.2% annual and 4.1% quarterly capital gains, underscoring continued strength in the sector. He concludes that as supply ramps up in the second half of the year, close attention will be needed to monitor its impact on pricing dynamics. Nonetheless, the outlook remains positive across residential, office, and industrial sectors. To learn more about ValuStrat's real estate market capabilities and our research outputs, please visit ValuStrat's Insights Webpage. About ValuStrat: ValuStrat is an international consulting group providing Advisory, Valuations, Research, Transaction Advisory, Due Diligence and Industrial Consulting services, working across various industry sectors. With 45+ years of experience, a network of 16 offices in 5 countries and a client base of 1,000 corporations across the Middle East, UK, Europe and Africa, ValuStrat assists diverse clients, from governments, multinationals, large local corporations and financial institutions to startups, SMEs and family businesses. For Valuation services, it is the preferred service provider to over 120 financial institutions across the EMEA region.
Khaleej Times
23-07-2025
- Khaleej Times
UAE: Over 40% of property buyers expect a drop in prices in the coming months
Property buyers are increasingly expecting prices to cool over the next six months, according to a survey released by Property Finder. Around 44 per cent of property buyers expect a price drop, while 30 per cent expect increases, and 26 per cent see prices remaining stable in June 2025. In the previous month of May, buyers were fairly divided, with 37 per cent believing prices would decrease, 34 per cent expecting increases, and 29 per cent anticipating stability. 'This shift suggests a growing perception that recent price surges may be easing, a sign of a more mature, considered view among home seekers and buyers as the market continues to evolve,' the brokerage firm said. The property portal also launched PF Market Pulse, a bi-monthly consumer sentiment survey that captures real-time insights into buyer and seller behaviour and market expectations across the UAE's property landscape. Property prices have rallied over the past four years as a large number of foreign professionals, businessmen, and millionaires flocked to the country due to its safety and security, investment opportunities and job openings. Prices in the UAE, on average, have seen a double-digit increase over the past few years. Most of the property brokerages and consultancies expect prices to have started to stabilise, and drop in some of the communities, after a four-year-plus rally. According to the ValuStrat Price Index (VPI), capital values in Dubai's freehold residential market continued to grow, though at a slower pace compared to 2024. Apartment prices rose by 19.1 per cent year-on-year, while villa prices increased by 28.7 per cent. This marks a slowdown compared to the same period last year, when apartment prices had risen by 23.4 per cent and villa prices by 33.4 per cent. Similarly, rental growth also moderated, with villa rents up 4.8 per cent and apartment rents up 7.2 per cent annually. Moreover, the UAE — especially Dubai — will also see a higher supply of new properties in the next couple of years, which will also put prices under pressure. According to CBRE, residential supply has been growing steadily post-pandemic, averaging 30,000 units per year since 2020. However, it added that the future pipeline has now swelled to unprecedented levels, with around 300,000 units set for delivery by the end of 2029, averaging around 60,000 per year. Importantly, Property Finder said more than seven out of 10 — 72 per cent — home seekers and sellers in the UAE plan to buy within six months, reflecting strong demand for home ownership in the country amidst rising rentals and capital appreciation. Sevgi Gur, chief marketing officer at Property Finder, said the results not only highlight a resilient appetite for home ownership in the UAE but also reflect a more informed, confident buyer that's increasingly responsive to market signals. According to Property Finder, over 13,000 respondents participated in the inaugural survey period of home buyers and sellers who were actively tracking market trends, pricing cycles, and supply shifts.
Khaleej Times
22-07-2025
- Khaleej Times
Dubai realty breaks records in Q2 despite cooling prices
Dubai's real estate sector delivered a record-breaking performance in the second quarter of 2025, with surging transaction volumes and resilient investor appetite, even as price growth showed signs of deceleration and affordability constraints began to surface. The market's dynamism was underpinned by strong off-plan sales, sustained demand for office and logistics space, and proactive government initiatives to boost homeownership. According to ValuStrat's Q2 research, property sales in Dubai hit new highs with nearly 37,000 off-plan transactions, averaging over Dh3.1 million per unit. Ready home sales also rose by 10.4 per cent from the previous quarter, registering 13,700 title deed transactions with an average price of Dh2.7 million. This momentum was particularly driven by robust activity in April and May. The ValuStrat Price Index (VPI) reflected continued but moderated capital appreciation. Apartment prices rose 19.1 per cent year-on-year, compared to 23.4 per cent in the same period last year. Villas saw a 28.7 per cent annual gain, also slower than the 33.4 per cent growth recorded in 2024. The VPI for apartments reached 188 points, and for villas, it climbed to 220 points — more than double the Q1 2021 baseline. Despite increasing supply, with 17,500 new homes completed in the first half and 66,596 units expected to be delivered in 2025, demand continues to outstrip supply in key segments. ValuStrat's head of real estate research, Haider Tuaima, noted that the elevated transaction activity highlights strong market confidence, though the impact of upcoming supply on pricing dynamics warrants close monitoring in the second half of the year. Rental growth, too, appears to be moderating. Apartment asking rents rose by 1.2 per cent quarterly and 7.2 per cent annually, with average annual rents at Dh95,500. Villa rents remained stable on a quarterly basis but were up 4.8 per cent year-on-year, averaging Dh428,000 annually. The overall VPI for residential rents rose by 1 per cent quarter-on-quarter and 6.2 per cent annually to reach 200.3 points. The office segment continued to show remarkable strength amid a supply-constrained environment. Capital values for office space rose 4.9 per cent quarter-on-quarter and 23.7 per cent year-on-year, compared to a 31.7 per cent annual rise in 2024. The banking, finance, and tech sectors are the major demand drivers. CBRE noted that average office rents in Dubai jumped more than 20 per cent year-on-year, with occupancy nearing full capacity in prime business districts. CBRE also reported a surge in residential transaction volumes, which climbed 23 per cent year-on-year in H1 2025. The total value of residential sales reached Dh270 billion. The launch of Dubai's First-Time Home Buyer Programme, which offers incentives such as flexible payment plans and preferential pricing, is expected to further encourage end-user demand and widen homeownership in the emirate. In terms of economic context, the UAE's GDP is forecast to grow 5.1 per cent in 2025, up from 3.8 per cent in 2024. This economic expansion is backed by recovering oil output, strong non-oil sector performance, and a resilient tourism sector. Dubai saw a 7 per cent year-on-year rise in international visitors between January and May, reinforcing the strength of the hospitality and retail segments. The industrial and logistics market is also flourishing. ValuStrat reported 16.2 per cent annual and 4.1 per cent quarterly capital gains for logistics warehouses, driven by sustained demand and high occupancy rates. CBRE added that strong rental growth and landlord-favorable market conditions are attracting heightened investor interest in Grade A industrial assets, signaling potential for more liquidity and development in the sector. In Abu Dhabi, the property market is showing parallel momentum. Apartment values rose by 18 per cent year-on-year, while villa prices gained nearly 14 per cent. The capital's office market is also seeing increased traction from international corporates, with occupancy and rents on the rise. Matthew Green, head of research for Mena at CBRE, attributed the UAE's real estate resilience to its diversified economy and progressive policy frameworks. 'The country continues to attract high-net-worth individuals, bolster foreign direct investment, and lead in innovation — all of which reinforce demand across residential, commercial, and industrial segments,' he said. Real estate market experts believe that with strategic government initiatives, strong demographic and investor fundamentals, and a proactive approach to urban development, Dubai's real estate market is poised to sustain its momentum through the remainder of 2025 — even as it gradually transitions from breakneck growth to more sustainable long-term expansion.
