Dubai real estate: Property market shows strength as stock index hits 17-year high
Dubai's residential property market continues to attract global investment as the emirate's main stock index rose over 25 per cent to reach a 17-year high in May 2025, according to Oia Properties' latest market analysis.
The property consultancy attributes the market strength to Dubai's GDP growth of 5-6 per cent for the year, coupled with the government's diversification strategy that has seen non-oil sectors contribute over 70 per cent of the emirate's GDP.
'Dubai is currently considered one of the hottest residential real estate markets in the world,' the company stated in its H2 2025 outlook released on June 10.
FDI and tourism fuel property momentum
Tourism figures support the growth narrative, with 19 million visitors recorded in 2024, representing a 12 per cent year-on-year increase.
Foreign direct investment in Dubai increased by 15 per cent year-on-year in early 2025, with international buyers accounting for over 45 per cent of real estate transactions in 2025 to date.
The market has also witnessed a 30 per cent year-on-year growth in foreign-owned real estate firms between 2024-2025, reflecting overseas appetite for Dubai property investment.
Branded residences, suburban shift, villa demand
Branded residences command a 30-40 per cent premium over non-branded luxury units, with inventory growing by 23 per cent in 2024.
New launches include Chelsea Residences by Damac, Trump International Hotel & Tower Dubai, and Bugatti Residences by Binghatti. Over 60 per cent of buyers in this category are overseas investors or second-home purchasers.
Suburban shift has seen price appreciation of 10-15 per cent year-on-year as buyers seek alternatives to peaked urban prices.
Areas such as Dubailand and Dubai South recorded a 35 per cent increase in transaction volume in early 2025. Rental yields in suburban zones average 6-7 per cent, compared to 4-5 per cent in prime urban centres.
Villa demand continues the surge that began during COVID, with luxury villa prices rising 20-25 per cent from 2022 to early 2025.
Villas now account for 28 per cent of total residential sales, up from 18 per cent in 2022. However, luxury villa supply is set to increase by 12-15 per cent over the next 12 months, potentially leading to a price correction of 5-10 per cent in late 2025 to 2026.
Top Dubai property investment hotspots revealed
Dubai South leads the rankings with a 10/10 growth projection. Average apartment sale prices stand at AED 954 per square foot, targeting investors and professionals linked to Expo City and Al Maktoum Airport developments.
Dubai Hills Estate received a 9/10 rating with average villa prices of AED 10 million. The area targets affluent families and executives seeking properties with golf course views, with a projected annual appreciation rate of 9.1 per cent.
Arabian Ranches also scored 9/10, with average villa prices of AED 1.9 million. Prices rose by up to 13 per cent in Q3 2024, driven by family-friendly amenities and suburban appeal.
Palm Jumeirah earned an 8/10 rating with average villa prices of AED 25 million, targeting ultra-high-net-worth individuals. The area anticipates an annual appreciation rate of 7.7 per cent.
Dubai Marina received an 8/10 score with average apartment prices of AED 2.3 million. The waterfront location recorded a 7.8 per cent year-on-year price increase.
Business Bay scored 7/10 with average apartment prices of AED 1.9 million, recording a 5.9 per cent year-on-year price increase driven by its location near Downtown Dubai.
Downtown Dubai received a 6/10 rating with average apartment prices of AED 2.5 million and a 2.9 per cent year-on-year price increase.
Jumeirah Village Circle scored 6/10 despite an 8.3 per cent year-on-year price decline, with average apartment prices of AED 880,000. The area maintains high rental yields and transaction volumes, indicating potential for recovery.
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