Engel & Völkers Middle East Report Shows Luxury Sector Sales Rising by 20.5% YoY; Office Rents Up 11%, Retail Rents 9.7%, and Warehouse by 21.1%
Dubai’s real estate market is set for another record-breaking year in 2025, driven by sustained investor confidence, a booming luxury sector, and growing commercial demand. According to a report by Engel & Völkers Middle East, strong economic fundamentals, population growth, and strategic government initiatives have helped Dubai secure its position as one of the world’s top real estate investment destinations.
Robust Growth in Luxury Sector Sales:
Sales in Dubai’s luxury real estate sector, particularly for properties worth over AED 10 million, rose by 20.5% year-on-year. The fourth quarter of 2024 saw sales surpassing last year’s record-breaking performance for the same period, reflecting the continued strength of the high-end market.
Rising Demand for Commercial Space:
A demand-supply imbalance in commercial space has contributed to double-digit growth in rental prices. Office rents saw an 11% increase, retail rents rose by 9.7%, and warehouse rental prices surged by 21.1%. The total number of residential real estate transactions increased by 40.3%, reaching 170,992 units—over five times the number recorded in 2020. Off-plan transactions dominated the market, accounting for 63% of all sales, up from 54% in 2023.
Expansion of Residential Sales:
Apartment sales were a key driver of this growth, with transactions up by 47.6%, making up 89.6% of the total market growth. Popular areas such as Jumeirah Village Circle, Business Bay, and Dubai Hills Estate led the off-plan sales, while established prime locations like Dubai Marina, Downtown Dubai, and Jumeirah Lakes Towers dominated in the ready-to-move segment.
Commercial Real Estate Strong Performance:
The commercial real estate market also performed strongly, with Dubai’s growing reputation as a global business hub driving demand for office space. Over 24,000 new businesses were registered in the first half of 2024, pushing occupancy rates in key commercial areas like DIFC, Downtown Dubai, and Business Bay to between 95% and 97%.
To meet this growing demand, developers like Aldar Properties have unveiled plans to build a Grade A office tower on Sheikh Zayed Road, with further commercial projects expected in 2025. The commercial sector is expected to continue expanding, especially in high-demand areas such as DIFC, Business Bay, Jumeirah Lakes Towers, and Al Quoz, as companies seek premium office spaces and state-of-the-art industrial facilities.
Outlook for 2025 and Beyond:
Daniel Hadi, CEO of Engel & Völkers Middle East, commented, “The combination of capital appreciation, high rental yields, and increasing foreign investment continues to solidify Dubai’s position as a top-tier global property market. As one of the world’s fastest-growing real estate markets, we will continue to see Dubai attract global capital, high-net-worth individuals, and multinational corporations. The growth we saw in 2024 provides a strong foundation for anticipating another record-breaking year in 2025.”
Investor sentiment remains highly positive, bolstered by new mega-developments like Palm Jebel Ali and The Oasis, catering to ultra-luxury buyers. Dubai’s government-led initiatives, including visa reforms, free-zone incentives, and a streamlined regulatory framework, are also enhancing the city’s appeal to businesses and investors.
“With ongoing infrastructure investments, mega-project launches, and sustained foreign interest, Dubai’s real estate market is on track to exceed expectations and reinforce its status as one of the most lucrative and resilient property markets globally,” the report concluded.
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