Will Dubai's property boom ever end?

The National

17-05-2025

Many Dubai property investors are getting more selective about where to put their money, experts have said. The Covid-19 pandemic instigated a boom that has eased off with buyers now thinking long-term about amenities, location and proximity to transport, they said. The National spoke to developers, salespeople, agents and more on the sidelines of the 'game-changers 2.0 real estate summit' in Dubai on Friday to gauge how the red hot market was going. Firas Al Msaddi, chief executive of Fam Properties and event organiser, said the market was at an "all-time high" with strong demand for both the resale and off-plan market. But he said people were becoming more selective as more off-plan units came on-stream as many developers had come to the UAE on the back of the boom and not everyone was 'producing the best of the best'. 'Every property buyer, every investor, [and] every broker are very sensitive to the overall value that product offers,' he said 'People are really … digging and understanding and learning before making a decision,' he said. 'Even if the market cools down a bit because of the supply, this is only temporary – it's only a matter of time for the demand to catch up.' Mohamad Abbas, sales manager at Dubai Holding Real Estate, said he had been in the market for 12 years and couldn't see an end to the boom. 'Maybe it will be stable in a couple of years from now, but it will never go down,' he said. Mr Abbas said in the past quarter they had sold villas for hundreds of millions of dirhams and the ultra-luxury market was strong. At the other end of the market people who wanted to buy cheaper units were willing to move to remote locations but people from across the world were buying. "I can say the United Nations are buying with us,' he said. 'The whole market is buying with us.' The National earlier this week reported on the unforgiving property world, with one agent stating only about 20 per cent of agents are doing really well – a sobering note far removed from the glitz on Friday. Dubai's housing market surpassed annual sales of Dh500 billion ($136.1 billion) for the first time in 2024, with huge demand for villas, town houses and apartments. The surge is being driven by liberalised visa rules, safety and security, more infrastructure, increased companies setting up, lower interest rates and the unrelenting population increase in the emirate. Consultants ValuStrat said about 90,000 new residents arrived in Dubai in the first quarter of 2025. According to Dubai Statistics Centre, the population of the emirate on Friday stood at 3.94 million. Top performing areas in Dubai include Jumeirah Village Circle, Business Bay, Dubai Hills Estate, Dubai South and Motor City. But what is more difficult to assess away from the headlines of lavish launches and unending booms is when the property market is going to cool. The event on Friday was a sell-out, with 2,000 tickets sold and some even shelling out Dh30,000 for VIP seats at the front. It aimed to share the latest trends, rules and regulations for brokers and agents, in partnership with the Dubai Land Department. Artificial intelligence was prominent with a report by Fam Properties stating AI was encouraging more younger buyers into the market as they could access data more easily. But questions about the boom were front and centre. Manan Law, managing partner at Dubai-based mortgage firm, Equifirst, said the surge that started in 2020 had ended as the world was no longer emerging from the major global event that was Covid-19. He said that in these scenarios Dubai and the UAE has always prospered as a haven. But he cautioned people expecting 50 per cent returns from that era would be disappointed, as this was now down to between 10 per cent to 12 per cent. 'In 2020, you could have closed your eyes and bought anything. And it would have yielded you a good return,' he said. 'Now you have to start looking at who is the developer; what is the community; what are the amenities; and what is being built around.' Mr Law said people in their keenness to get on the property train were forgetting that property was a 'fixed illiquid asset and it takes time'. 'It is not a stock. You're not supposed to buy a property today and it'd be up 15 to 20 per cent in a year," he said. 'That's not how real estate works. it is a long-term investment.' Mr Law confirmed the market was maturing and mortgages accounted for 40 per cent of sales in Dubai with lower interest rates helping. "To make the investor feel more comfortable, there's more and more heavier lean towards financing,' he said. 'It's just the normal progression.'