Soaring population increases Dubai real estate demand

Dubai’s rising population is sending up demand for real estate in the city, according to ValuStrat analysis.

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 had risen to 3.92m, with 89,695 new residents added in just the first three months of the year, an average of approximately 1,000 people per day.

Dubai real estate 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 per cent, 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.

Securing an affordable home to buy or rent is becoming more 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 per cent, while villa prices have increased by 30.3 per cent.

Rental rates have also surged, with villa rents up by 5.1 per cent and apartment rents rising by 10 per cent.

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 per cent annual increase in capital values and a 20.2 per cent increase in asking rents.

The hospitality and industrial sectors also sustained positive growth.

Haider Tuaima said 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, though this is only when compared to the previous quarter.