Housing demand in Dubai has reached unprecedented levels as a growing population continues to drive absorption of supply in the residential market, according to real estate consultancy ValuStrat.
By the end of March, Dubai’s population had risen to 3.92 million, with 89,695 new residents added in just the first three months of the year, an average of approximately 1,000 people per day. The net population increase for 2024 was 170,478 people, averaging less than 500 per day, ValuStrat said in a new report.
“Securing an affordable home to buy or rent is becoming more difficult in an increasingly unaffordable market,” said Haider Tuaima, managing director and head of real estate research at ValuStrat.
“There has been consistent annual growth in capital values across all segments, according to the ValuStrat Price Index, which tracks the residential market. Apartment prices have risen by 21.4 per cent, while villa prices have increased by 30.3 per cent. Rents have also surged, with villa rents up by 5.1 per cent and apartment rents rising by 10 per cent.”
The number of people seeking to buy or rent outstrips the volume of available properties. An earlier report issued by ValuStrat said that 27,000 new homes were completed in 2024, which the consultancy said was the lowest figure for six years. Meanwhile, the emirate's population continued to grow, meaning demand was significantly outstripping supply.
Dubai's property market has been benefiting from government initiatives, such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE’s economy on diversification efforts.
Around 61,580 new homes are estimated to be delivered in Dubai this year, 70 per cent being apartments, and 30 per cent villas/town houses. Of these, 19 per cent, nearly 12,000 apartments and villas, were completed in the first quarter alone, ValuStrat found.
“This is not unexpected, considering that just over half of last year’s projected deliveries were ultimately handed over,” Mr Tuaima said.
ValuStrat estimated that 141,404 apartments and 29,649 villas and town houses are actively under construction, with handovers promised by 2029. Of these projects, 12 per cent is located in Jumeirah Village Circle, with another 7 per cent located in Business Bay followed by Jumeirah Lakes Towers with 5 per cent, the consultancy found.
Off-plan Oqood (contract) registrations declined by 8 per cent in the first quarter compared to the previous three months, but were 37.5 per cent higher annually, representing investments totalling Dh77.3 billion. The first quarter recorded 12,396 secondary ready home transactions, up 5.8 per cent year-on-year but down 7 per cent quarter-on-quarter, equivalent to investments worth Dh33billion, the data showed.
The Dubai real estate market registered 9,388 mortgage transactions across all asset classes in the first three months of 2025, compared to 14,386 cash transactions of ready properties. The total sales value attributed to mortgage transactions stood at Dh21 billion, with cash transactions totalling Dh33 billion.
“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. This trend is neither unprecedented nor unexpected and may be attributed to a mismatch between supply and demand, potentially leading to a market correction at some point,” according to Mr Tuaima.
On average, most apartment communities remain 8.1 per cent below their capital values from a decade ago. Notable exceptions include Palm Jumeirah, The Greens and Jumeirah Beach Residence. In contrast, villa valuations in Dubai are, on average, 59.9 per cent above their previous market highs from 10 years ago.
During the first quarter, villa capital gains recorded a 30.3 per cent annual and 6.2 per cent quarterly increase. The most significant yearly growth was observed in Jumeirah Islands, Palm Jumeirah, Emirates Hills and The Meadows, while Mudon recorded the lowest gains, ValuStrat found.
Apartment values posted a decelerated annual increase of 21.4 per cent and quarterly growth of 3.8 per cent. The highest capital gains over the year were seen in The Greens, Dubailand Residence Complex, Palm Jumeirah, Town Square and The Views.
Villa asking rents remained stable quarterly but were up 5.1 per cent annually. Apartment asking rents increased by 1.6 per cent quarterly and 10 per cent yearly, the consultancy said.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - March 2025
