Dubai made 2024 the most auspicious year and its position in the real estate market grew considerably. However, these trends are not always 100 percent successful, and there is a dark side to Dubai that many are beginning to talk about. It is about the excessive increase in property values which, according to The National newspaper, will continue to grow exponentially in the next two or three years.
There is a phenomenon growing in Dubai related to the excessive increase in property values and, therefore, rents, which does not match the amount of existing constructions. In other words, demand has outpaced supply, and experts have raised alarms about this trend.
The dark side of Dubai that few talk about
One of the companies that brought to light the harsh reality of Dubai was the consultancy ValuStrat, which, through a report, confirmed that the construction of complexes, buildings, and villas decreased in 2024. As they revealed, only 2,700 homes were built, one of the lowest figures in the last six years. This trend is what alarms specialists who are also concerned about the growing population of the city.
Currently, this emirate has more than 3.8 million residents, many of them expatriates who were encouraged by government policies to settle in Dubai thanks to the benefits of the Golden Visa and the zero tax cost on investments. In this way, the demographic density has impacted this area of the economy where demand exceeds supply and contributes to rising prices.
What is the most alarming trend in Dubai
Although growth possibilities are infinite in Dubai, economic specialists remain vigilant of this new trend. Building construction remains high in this area, although house constructions are not as abundant, which negatively impacts prices. Experts state that it is necessary to increase this and ensure that the number of delivered homes grows.
According to reports from some financiers, it is expected that 2027 will be the year when supply matches demand to bring values back into balance. For this vision to materialize, it is necessary to wait and for residents to tolerate rising prices. For this reason, many residents (local or not) are choosing locations further from the city to settle there and regulate their cost of living. Beyond Dubai, many are choosing Sharjah as an ideal destination to settle.
The increases in Dubai that worry experts
The company ValuStrat provided an overview of the current situation in Dubai, reporting on the percentage increases. As indicated, apartment values increased by 23.6% and villas by 31.6%, confirming that the residential market saw the highest increases. According to the consultancy, these values have doubled compared to the pandemic, and the supply is expected to match demand only by 2028.
Before 2024 ends, real estate specialists predicted a rental increase of 10 percent for 2025. Residential areas are expected to be the most affected by this trend, along with Dubai’s outskirts, where many residents are choosing to relocate. As indicated above, the growing population has contributed to this situation and, according to the Dubai Statistics Center, the emirate’s population reached 3.814 million on December 10, 2024, compared to 3.654 million at the end of 2023, an increase of 159,522.
