Dubai’s property market is on a tear, charging towards its longest price rally since the 2008 crash, with homes now fetching an average of Dh1,750 ($476.50) per square foot—a dizzying 75% leap since February 2021, according to Reidin.
Fuelled by a buzzing economy and a population boom nearing 3.8 million, the Middle Eastern hotspot is just seven months shy of its pre-crisis 57-month record. But as cranes pepper the skyline and prices soar, whispers of a bubble are growing louder.
The city’s pulled in nearly half a million newcomers since 2020, from tax-dodging millionaires to war-fleeing Ukrainians, thanks to relaxed visa rules and a pandemic-era welcome mat.
That’s flipped the script on Dubai’s villas and flats—once speculators’ playgrounds, now hot for families settling in.
“They’re building a lot of apartments and not building enough houses,” says Barnaby Compton, a Dubai estate agent. “We have an ageing population and we have more families moving in with kids.”
At the top end, gated villa communities have doubled in value over four years, notes Alec Smith of Savills Dubai: “increased over 100 per cent in the last four years.”
For some, the rally’s too tempting to resist. Malek, a banker in Arabian Ranches, snagged a villa last year, planning to move in—until he clocked a potential “60 [and] 80 per cent annual return” by selling. “There is a strong appetite,” he says, expecting Dh1.5 to 1.9 million this week. “The upside is too attractive not to sell.
Developers are cashing in too—Emaar raked in a record Dh65.4 billion ($17.8 billion) in 2024 sales, while sukuk issuance for property firms jumped 25% to $2.17 billion.
With 300,000 homes slated by 2029—50,000 a year against a past average of 36,000—the boom’s got legs, says Katralnada BinGhatti of Binghatti:
“Will Dubai continue to see the double-digit growth? Obviously not, because that’s how any market behaves,” but she’s “fairly confident” it’ll stay “a healthy place for the short to medium term.”
Yet, not everyone’s sold on the ride. Tamara, a three-year resident, bought a villa in a lakeside spot, hoping to rent it big.
“Within the next five years I think that the market is probably going to still be OK,” she says, though it’s been 10 weeks without a tenant. “I don’t think the market for too long will carry on rising.”
Talal Al-Gaddah of MAG sees a reckoning: “I don’t think it will keep going up like that because now there is a lot of competition.”
He reckons undercutting rivals is the play—“you win the market faster and you sell faster,” he says. “So the prices will not go up, because of the massive competition.” Developer Danube’s already pitching one-beds at studio prices, hinting at cracks.