Dubai Real Estate Market: 2025 Outlook
The Outlook For Dubai's Real Estate Market is Optimistic
Despite market watchers predicting a crisis as early as 2021, and forecasting a price crash in 2022, and making similar predictions in 2023, Dubai defied all pessimistic expectations — 2024 has broken all records.
In the third quarter of 2024, Dubai's real estate transactions reached 141 billion AED ($38.6 billion). This marks a 30% increase compared to the same period in 2023.
Prices continue to rise, but as with any investment, understanding the details is crucial — much depends on the specific property.
- Lower-priced properties carry more risk. For example, a studio apartment in a residential area that's indistinguishable from hundreds of similar units could see a significant price drop. That said, rental rates are rising rapidly, which makes these properties well suited for passive income from short- and long-term rentals.
- Premium properties are more secure and show more stable price growth. A penthouse in Business Bay or a townhouse in Dubai Hills Estate is likely to appreciate in value. The same applies to apartments in these areas.
Why Are Prices Rising
Here are 6 key reasons behind Dubai's real estate price growth:
1. Brilliant Marketing
Dubai's government masterfully promotes the city's investment appeal. First, they create a unique project like the Burj Khalifa that captures worldwide attention. Then, they develop infrastructure for living and working around these landmarks.
The government's strategy can be described as:
- Attract attention with a unique project
- Create a comfortable living environment around it
2. Advanced Infrastructure
The city is actively developing its infrastructure. According to the Dubai 2040 plan, parks and green spaces will increase by 105%. Nature parks and reserves will cover 60% of the emirate. 55% of residents will be able to reach a metro station within a 10-minute walk.
And that's not the only example. Dubai's roads surpass American and European standards — they're truly perfect. Another example: how authorities respond to natural disasters. After the abnormal rains in April 2024, the government immediately began constructing a new drainage system. They saw a problem and tackled it right away.
Soon, the city will see new major projects:
- A monorail between Dubai and Abu Dhabi
- The artificial island Palm Jebel Ali
Palm Jebel Ali — the second palm island — is twice the size of The Palm Jumeirah. You can already buy property there, for example, in a prestigious Palm Jebel Ali Fond C project. If you're interested in learning more about the advantages and risks of investing in this area, contact Mira Real Estate experts.
3. Stable Economy
The best example of stability is the AED–USD exchange rate. Since 2010, it has barely changed, staying around 0.27. It's one of the world's most stable currencies, even more reliable than the euro.
4. Political Neutrality
Since its founding, the UAE has been part of the non-aligned movement, following the principle of "absolute neutrality." This allows it to maintain equal distance from both West and East.
This position has made the UAE a magnet for global elites, especially from the Middle East. For example, when political unrest began in Libya, many local investors moved to the UAE and invested in real estate to live in Dubai themselves and earn rental income. This helps sustain market price growth.
5. Tourism
Dubai welcomes over 16 million tourists annually.
The city attracts visitors not just with its luxury hotels and skyscrapers, but also with spectacular events. Some examples: Dubai Shopping Festival — a shopping extravaganza that draws millions of people. GITEX Global — one of the world's leading technology exhibitions. Dubai World Cup — a prestigious horse racing event with a $12 million prize pool. And Expo City Dubai, the successor to the famous Expo 2020, showcases innovations from different countries year-round.
Each of these events brings new visitors to the city, increasing demand for rental properties.
6. Favorable Tax System
The UAE's tax system is remarkably straightforward:
- VAT is 0% or 5% on turnover
- Corporate taxis is 0% or 9% on net profit
- No personal income tax, salary tax, or dividend tax
- No taxes on property rental income or sales
It's difficult to predict how the UAE's tax system might change in 2025. However, based on past experience, the government tends to lower taxes rather than raise them.
Example: In 2011, the UAE and Russia signed a special investment taxation agreement that exempted certain companies from export and import taxes. This was how the government supported logistics development.
It's highly likely that the tax system will either remain unchanged or become even more attractive.
What's Ahead for Rental Rates and Demand
We're confident they'll continue to rise. Mira Holding manages over 700 projects, and our statistics confirm this.
Here's an example from our experience: Two years ago, apartments in Park Ridge (Dubai Hills area) rented for 75,000 AED per year. Today, similar apartments cost 125,000 AED. That's a 66% increase in two years, or approximately 30% growth annually.
Potential Returns from Rental and Resale
Rental typically yields 6–9% annually, reaching up to 12% in some areas.
Resale profit depends on the property itself. To sell a property profitably, it should meet at least one of these criteria:
- Have a special advantage, like beachfront access.
- Offer exclusivity, where demand exceeds supply.
- Be located in a promising area with growth potential, such as City Walk — a premium part of Downtown Dubai.
For example, property values in City Walk increased by 70% during construction. In other words, investors who bought apartments there at launch nearly doubled their investment. You may consider looking at City Walk Crestlane and Verve City Walk projects, which are under construction in this area right now.
Important: When calculating resale profits, consider additional expenses:
- 4% of property value for Dubai Land Department (DLD) registration
- Around 2% agent commission when buying on the secondary market
Common Mistakes to Avoid in 2025
Investors most often lose money for two reasons:
- They invest in illiquid properties without proper market research and information verification.
- They make decisions based on advice from questionable sources.
How to protect yourself:
- Work only with certified brokers — they must have a RERA (Dubai's Real Estate Regulatory Agency) card.
- Request precise calculations that can be verified through official sources.
- Research projects yourself, even if you trust your broker.
Which Projects to Invest in Now
We recommend considering these three promising projects:
1. Dubai Islands
Four artificial islands off Dubai Island Beach. This will become a true "city-within-a-city" with its own shopping centers, golf courses, and the Middle East's first superyacht marina. The islands will feature 23 kilometers of beaches — possibly the rarest land plots in Dubai.
Projects in Dubai Islands:
2. The Acres
A residential complex with villas set in nature. It features spacious homes with private plots, surrounded by a large green park with walking trails, ponds, and lakes. All villas and apartments are built using eco-friendly materials.
More information about the project:
3. District One
An exclusive neighborhood just 4 kilometers from Burj Khalifa. It features Crystal Lagoon — the world's largest artificial lagoon stretching 7 kilometers. You can choose between villas or apartments. The area appeals to both investors and residents. It's convenient for those working in Downtown and perfect for families: it offers parks and an 8-kilometer network of running and cycling tracks.
Here’s a noteworthy project in District One — District One Residence 28.
What’s next?
These are just a few examples among dozens of promising projects in the UAE. If you want to learn more but don't know where to start — schedule a free consultation with Mira Real Estate. Our experts will provide detailed information about other interesting properties during a video meeting, answer your questions, and help you choose the right investment option.
