Number of New Homes Completed in 2024 Was the Lowest in Six Years, Report Reveals, Despite Surge in Population.
Property prices in Dubai are expected to keep rising for at least the next two to three years, as the demand for both buying and renting continues to outstrip the supply of available properties, experts told The National.
A new report by ValuStrat, a management consultancy, showed that almost 27,000 new homes were completed in 2024, marking the lowest number in six years. At the same time, Dubai’s population kept growing, which means the demand for homes is much higher than the available supply. The report highlighted that 20,066 new apartments were completed last year, compared to 6,891 villas.
The main issue is the imbalance between the number of new apartments being built and the relatively smaller number of houses or villas. ValuStrat’s report estimates that 118,401 apartments and 28,351 villas and townhouses are under construction, with a promise for completion 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 build a tower and have everything in it than to spread out into individual units like townhouses or villas. The number of houses delivered last year was quite low. For prices to soften, we would need at least double the number of houses built.”
Volpi suggests that the earliest the supply might catch up with demand is by 2027, meaning rental and property prices could remain high until then.
A Simple Case of Supply and Demand:
According to Matthew Green, head of research for real estate firm CBRE Mena, the supply of housing is not keeping up with the growing number of new residents in the emirate, with the population now exceeding 3.8 million. “Prices and rents are expected to continue rising during 2025, but at a slower rate than in 2023 and 2024,” Green said.
“However, as the number of new residential properties increases between 2026 and 2028, we expect to see more balance between supply and demand, which should help moderate the rapid rise in prices, especially in areas with many new units.”
Green also mentioned that increasing indicators of residential demand, such as more trips through Salik gates, mobile phone registrations, and DEWA connections, point to continued high demand. While the post-COVID boom in off-plan sales has significantly increased the number of properties under construction, around 40,000 to 45,000 units are expected to be delivered in 2025, with more coming in 2026 to 2028. This influx of new homes is expected to moderate growth in rental and sales prices in the long term.
Rising Costs in the Market:
Dubai’s population grew by 170,000 people in 2024, and it is expected to continue growing at a rate of 3.6% per year until 2030. The average cost of buying an apartment in Dubai grew by 23.6%, while villas saw a 31.6% increase. Rent also rose, with apartments increasing by 13% and villas by 5.8%.
Haider Tuaima, director of real estate research at ValuStrat, said, “We have a rising population, but we don’t have enough supply of properties to match it. Rents have already more than doubled since the pandemic and have surpassed the previous peaks in 2014.” Tuaima expects the supply to finally meet demand by 2028.
Supply Pipeline:
ValuStrat’s report estimates that almost 150,000 properties will be delivered by 2028, with 12% of these properties expected to be located in Jumeirah Village Circle (JVC), 8% in Business Bay, and 5% in Jumeirah Lake Towers (JLT).
Developer’s Insight:
Mohammed Tahaineh, general manager of projects at Damac, commented, “Dubai’s rapid population growth and its position as a global hub for investment continue to drive strong demand for housing.” He explained that the property sector is responding by looking for “innovative solutions” using advanced construction technologies and strategic planning.
Christopher Cina, development sales and consultancy director at Betterhomes, noted that despite the anticipated price increase, it might not be as high as previously expected. “With over 72,000 units scheduled for handover in 2025, the market will see a significant increase in supply, helping to balance the demand that has driven up property prices in recent years,” Cina said. “A moderate increase in both rent and sales prices of less than 10% is expected as the supply pipeline builds.”
Watch the latest video on Dubai’s property market and trends in prices and rents:
