As Dubai’s luxury real estate market continues to defy expectations of a slowdown, experts are more confident than ever that the current boom is not just a short-term trend but a sustainable cycle set to last through 2025.

Faisal Durrani, Partner - Head of Research, MENA at Knight Frank, notes that buying patterns suggest an increasing shift towards “genuine end users of real estate rather than speculative investors.” This trend, he explains, signals a more stable and enduring market.

“Over the past 18-24 months, Dubai has emerged as the world’s deepest market for $10 million-plus home sales, with high-net-worth individuals (HNWI) seeking prime luxury beachfront villas,” Durrani told Business Recorder during a recent interview in Dubai.

Dubai Real Estate Strategy Aims for AED 1 Trillion Market by 2033

In the last 12 months, Dubai has matched the sales of $10 million homes as seen in London and New York combined, according to Knight Frank’s recent *Destination Dubai* report. This illustrates the growing appeal of the emirate as a desirable place to live, work, and invest.

"This is a remarkable achievement for a market as young as Dubai," Durrani said, highlighting the strength and resilience of the city’s real estate sector.

“While volatility is common in emerging markets, this cycle’s fundamentals are far stronger than in previous years.”

Defining Prime Property in Dubai

Prime residential real estate is a term that often needs clarification. Durrani explains that it typically refers to properties located in the central business districts or in close proximity to them.

Dubai has five central business districts. To assess prime property, Knight Frank analyzed every residential transaction over the past 22 years to identify neighborhoods with consistently high-value sales. Currently, only four neighborhoods qualify as prime: Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, and Jumeirah Islands.

The Luxury Market’s Continued Strength

Understanding the success of Dubai’s luxury market requires considering the unique factors at play since the pandemic. The UAE’s strong response, including its position as the world’s most vaccinated nation, allowed Dubai to reopen early and become a haven for those seeking a more stable living environment.

“Many buyers discovered firsthand the factors that make Dubai an attractive destination, including its safety, infrastructure, and lifestyle offerings,” said Durrani.

Demand Outpaces Supply

A key factor keeping the market robust is the supply and demand imbalance. The volume of home listings across Dubai is down by 23% year-on-year, but the supply of luxury homes priced at $10 million or more has dropped by 50%.

"Developers are racing to meet the demand, and buyers are purchasing properties not to flip them but for personal use," Durrani explained.

Knight Frank’s *Destination Dubai* report revealed that nearly half (49%) of global ultra-high-net-worth individuals (UHNWI) with personal net worth exceeding $20 million plan to invest in UAE real estate in 2024. An additional 30% are looking to buy over the next 2-5 years.

Dubai: The Global Magnet for Wealth

Dubai's status as a global destination for the wealthy has become undeniable. In 2022, Indian billionaire Mukesh Ambani broke records by purchasing a $163 million mansion on Palm Jumeirah. More recently, Brazilian soccer star Neymar Jr. acquired a $54 million penthouse in the Bugatti Residences by Binghatti.

The emirate’s favorable tax regime, ease of business, and evolving visa options, including the Golden Visa, have made it an attractive destination for international investors. Dubai's continued success parallels the appeal of Monaco, a long-established haven for the global elite.

Dubai is also making strides to become the world’s fourth-largest financial center, surpassing Hong Kong, according to Knight Frank data.

“The investments into the infrastructure, such as the $34 billion expansion of Al Maktoum International Airport, demonstrate the emirate’s commitment to long-term growth,” Durrani explained.

Growth of Prime Office Spaces and Business Sentiment

The commercial real estate market in Dubai is also seeing strong growth. With record-high demand for office space, especially in prime locations, vacancy rates are at historic lows. “There is a very real shortage of prime office space in the market, and much of the 4.2 million square feet of new office space coming over the next five years is already pre-leased,” Durrani added.

Looking Ahead: Real Estate Growth Expected to Continue Through 2025

Dubai’s real estate market has grown by 20% year-on-year, with some areas seeing even higher returns. The market has now surpassed the 2014 peak by 6.5%, reflecting both a recovery and sustained growth.

“We originally forecasted a 3.5% price growth for 2024, but current trends suggest we may see higher growth by the end of the year, carrying momentum into 2025,” said Durrani.

The long-term outlook for Dubai remains optimistic. The combination of favorable market conditions, sustained demand from international buyers, and strategic infrastructure investments suggest that Dubai’s real estate boom is likely to continue well into 2025.