The soaring population in Dubai is significantly driving up the demand for real estate, reshaping the urban landscape and housing market. New insights from ValuStrat highlight the remarkable growth in the city’s population and how it influences various segments of the real estate market. As Dubai’s demographic trends evolve, the implications are profound for housing, rental prices, and overall market dynamics, all contributing to an unprecedented surge in Dubai real estate demand.
Housing demand reached unprecedented levels, said Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat.
By the end of March 2025, Dubai’s population is projected to rise to 3.92 million, with 89,695 new residents added in just the first three months of the year, averaging approximately 1,000 people per day. This rapid population increase further fuels the ongoing demand for real estate in Dubai.
Trends in Housing Supply and Demand
For perspective, the entire net population increase for 2024 was 170,478 people, averaging less than 500 per day. The estimated number of new homes expected to be delivered this year stands at 61,580 units. Of these, 19 percent—nearly 12,000 apartments and villas—were completed in the first quarter alone. This is not unexpected, said ValuStrat, considering that just over half of last year’s projected deliveries were ultimately handed over, underpinning the exceptional demand for real estate in Dubai.
Securing an affordable home to buy or rent is becoming increasingly difficult. According to the ValuStrat Price Index (VPI), which tracks the residential market, there has been consistent annual growth in capital values across all segments. Apartment prices have risen by 21.4 percent, while villa prices have increased by 30.3 percent. Rental rates have also surged, with villa rents up by 5.1 percent and apartment rents rising by 10 percent.
Commercial and Office Space Demand
The demand for office space in Dubai remained strong, driven by sustained economic growth and business expansion. The VPI tracking the office sector showed an impressive 29.1 percent annual increase in capital values and a 20.2 percent increase in asking rents, reflecting robust demand across various property types in Dubai.
The hospitality and industrial sectors also sustained positive growth, indicating broad-based demand in multiple facets of the real estate market. Haider Tuaima noted that 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; however, this is only in comparison to the previous quarter.
As Dubai continues to grow, both in population and economic activity, the escalating demand for real estate is likely to shape the city’s future. The interplay of increasing resident numbers and the strains on housing supply will be crucial for stakeholders to monitor as they navigate the evolving landscape marked by soaring demand for real estate in Dubai.