Dubai property prices and rents ‘set to keep rising for next few years’ amid sustained demand

Report reveals that the number of new homes completed in 2024 has plummeted to a six-year low, despite a sharp surge in population.

Dubai Property Prices Set to Rise for Years as Housing Shortage Intensifies

Dubai’s property prices are expected to continue their upward trajectory for at least the next two to three years, according to experts speaking to The National.

Rental costs in the emirate are also projected to rise during the same period, as demand for homes far exceeds the supply of available properties. A newly released report by ValuStrat management consultancy reveals that just 27,000 new homes were completed in 2024—the lowest number in six years.

Despite this slowdown in construction, Dubai’s population continues to grow, exacerbating the supply-demand gap. The report details that 20,066 new apartments and 6,891 villas were delivered last year, highlighting a significant shortfall in standalone housing.

Experts point to an imbalance in construction trends, with apartment buildings far outpacing villa and townhouse developments. According to ValuStrat, 118,401 apartments and 28,351 villas and townhouses are currently under construction, with handovers expected by 2028.

“There is a distinct lack of houses being built compared to apartments,” said Mario Volpi, head of brokerage at Novvi Properties. “It’s easier to construct a high-rise with multiple units than to develop standalone townhouses or villas spread across a larger area.”

He emphasized that supply must at least double before property prices begin to stabilize. “The number of houses handed over is quite low. At this rate, it will be 2027 at the earliest before supply catches up with demand and prices start to ease,” he added.

With a rapidly growing population and a limited number of new homes coming onto the market, Dubai’s property sector looks set for continued price hikes—making both renting and buying increasingly competitive in the years ahead.

“There is a distinct lack of houses being built compared to apartments,” said Mario Volpi, head of brokerage at Novvi Properties. “It’s easier to build a tower and have everything in it than have it all spread out in individual units like townhouses or villas.

“The number of houses handed over [in the report] is quite low. For prices to start softening then we need to have at least double that number.”

He suggested it would be 2027 at the earliest before supply caught up with demand and the cost of renting or buying a property subsided.

Another expert told The National it came down to a simple case of supply and demand.

“The market is telling us we do not have enough housing supply to meet the rising number of new residents moving to the emirate, with the population now above 3.8 million,” said Matthew Green, head of research for real estate firm CBRE Mena.

“Prices and rents are expected to continue rising during 2025, but at a slower rate of growth than was recorded during 2023 and 2024.

“However, as the number of new residential deliveries increases through the period 2026-2028, we expect to see a more balanced supply and demand equation emerge, leading to some moderation of pricing growth from the current high levels, particularly for areas with significant unit completions.”

This was also reflected in what he described as proxy indicators of residential demand such as increasing trips through Salik gates, mobile phone registrations, and DEWA connections.

“However, the post Covid boom in new off-plan sales launches has significantly swelled the development pipeline, with around 40-45,000 new units expected to be delivered in 2025, with annual deliveries then moving much higher again during the period 2026-2028,” said Mr Green.

“This is likely to help moderate growth in rental and sales rates in the longer term, although for now demand continues to outweigh supply.”

The emirate’s population stands at 3.83 million, with growth projected at 3.6 per cent annually until 2030. The ValuStrat report also said Dubai’s population grew by 170,000 people in 2024.

Other findings in the study showed the average cost of buying an apartment grew by 23.6 per cent, with villas increasing by 31.6 per cent. The cost of renting also grew with apartments rising by 13 per cent and villas going up by 5.8 per cent.

“We have a rising population but we don’t have the supply [of properties] to match it,” said Haider Tuaima, director and head of real estate research with ValuStrat.

“Rents have already more than doubled since the pandemic and definitely have surpassed the previous peaks in 2014,” said Mr Tuaima. He added that current projections show supply could finally catch up with demand by 2028.

His reasoning was based on a pipeline of almost 150,000 properties set to be handed over to owners by 2028. Of these properties, 12 per cent were expected in the city’s Jumeirah Village Circle (JVC) area. Another 8 per cent were due for Business Bay, followed by 5 per cent in Jumeirah Lake Towers (JLT), according to the report.

Other findings in the study showed the average cost of buying an apartment grew by 23.6 per cent, with villas increasing by 31.6 per cent. The cost of renting also grew with apartments rising by 13 per cent and villas going up by 5.8 per cent.

“We have a rising population but we don’t have the supply [of properties] to match it,” said Haider Tuaima, director and head of real estate research with ValuStrat.

“Rents have already more than doubled since the pandemic and definitely have surpassed the previous peaks in 2014,” said Mr Tuaima. He added that current projections show supply could finally catch up with demand by 2028.

His reasoning was based on a pipeline of almost 150,000 properties set to be handed over to owners by 2028. Of these properties, 12 per cent were expected in the city’s Jumeirah Village Circle (JVC) area. Another 8 per cent were due for Business Bay, followed by 5 per cent in Jumeirah Lake Towers (JLT), according to the report.