Dubai Real Estate Market: Supply Shortages Are Driving Property Prices Up
Dubai’s real estate market is booming, with property prices rising by 19.1% in the past year alone. The average price per square foot is now AED 1,685 ($459), a 13.3% increase since the 2014 peak. Villas are seeing even higher demand, with an average price of AED 2,009 ($547) per square foot, marking a 20.2% year-on-year increase and a 38.1% rise above 2014 levels.
This rapid price growth is fueled by increasing demand from both high-net-worth individuals (HNWIs) and end-user buyers seeking long-term investments. But with a 30% decline in available properties and a 52% drop in prime listings, the supply shortage is putting even more pressure on prices.
What’s Driving Demand in Dubai’s Real Estate Market?
Dubai has always been a magnet for investors and homebuyers, but 2024 has seen a shift in buyer behavior. More genuine end-users are entering the market, rather than just speculative investors. Some key factors making Dubai a top real estate destination include:
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Luxury Living & Exclusive Communities
Buyers are looking for properties with beachfront access, greenery, and wellness amenities. Communities like Palm Jumeirah, Dubai Hills Estate, and Downtown Dubai offer a blend of exclusivity and high-end living.
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Booming Luxury Property Market
Dubai’s prime residential market remains a safe haven for investors. In high-end areas, properties are selling at AED 6,627 ($1,805) per square foot, reflecting a 16.9% increase from last year. The number of homes sold for over $10 million reached a record 435 transactions in 2024.
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Strong Investor Confidence
With foreign investors, especially from Russia, increasing their spending by 20%, Dubai’s luxury segment is experiencing unprecedented demand. But the lack of available high-end properties is making it harder for buyers to find prime real estate.
Dubai’s Real Estate Supply: Will New Projects Meet Demand?
Even though over 302,880 new residential units are under construction, experts predict that only 60,576 homes will be completed annually over the next five years. This is significantly higher than the previous average of 36,000 homes per year, but supply is still falling short.
A 30% delay in project deliveries means many developments won’t be completed on time, further tightening the market. This gap between supply and demand is why prices are expected to continue rising into 2025 and beyond.
Why Now Is the Best Time to Invest in Dubai Real Estate
With supply running low and prices steadily climbing, now is the best time to invest in Dubai’s real estate market.
Here’s why:
- High ROI & Price Appreciation. Dubai’s luxury market is seeing record-breaking price growth, making property investments highly profitable.
- Tax-Free Property Ownership. Dubai offers zero property taxes, allowing investors to maximize their profits.
- Residency & Long-Term Investment Benefits. Investing in Dubai real estate can grant Golden Visa eligibility, providing long-term residency and business opportunities.
- Stable & Growing Market. Despite global economic fluctuations, Dubai’s real estate sector remains resilient, offering a secure investment environment.
A Seller’s Market with High Returns
Dubai’s real estate market is currently a seller’s paradise, with rising demand, limited supply, and record-breaking property values. Investors looking for high returns and long-term gains should act now before prices climb even higher.
