Property prices to keep going up in 2025 and into 2026 because many buyers want to buy
More people from Europe want to buy property in Dubai, and this is expected to keep happening next year as more Europeans move to the UAE because the economy is growing strong.
“The group of customers has changed now. The biggest buyers are from Europe, not from Russia or Ukraine anymore. We think this will keep happening and will grow more in 2025,” Ali Sajwani, managing director of Damac Properties, told The National.
The slowing economy in Europe, new taxes, and changes to rules for UK residents who are not from the country are some reasons why more Europeans are moving to Dubai and starting businesses there, Mr. Sajwani said.
This trend is “boosting the mid- to high-end property market (houses costing between Dh3 million to Dh8 million),” he added.
The UAE property market has been growing a lot in recent years as more people buy homes. Government programs like residency permits for retirees and remote workers, expanding the 10-year golden visa program, and the UAE’s economy growing because of different business efforts are also helping the property market.
In the third quarter, average prices in Dubai’s residential market went up by almost 20 percent compared to last year. This was supported by a 19 percent rise in average apartment prices and a 23 percent increase in average villa prices, according to a report from CBRE.
“Europeans are still the main investors in Dubai’s residential sector, with people from the UK leading the way,” Matthew Green, head of research at CBRE Mena, said.
“This steady flow of money from Europe is supported by high property and income taxes in much of Europe and expectations that these taxes will go up more after recent announcements. There are also ongoing worries about safety in many cities and the lower quality of life for many people because of high inflation, high interest rates, and stagnant salaries.”
In October, Britain’s first female chancellor, Rachel Reeves, presented her first budget to parliament, announcing £40 billion in tax increases.
The UK budget plans to raise employers’ national insurance contributions and increase capital gains tax. It will also change inheritance tax and stamp duty. The non-domiciled status will be removed.
Value-added tax will start on private school fees from January, and stamp duty on second homes has been raised to 5 percent.
Dubai-based Devmark also said that British nationals were the top foreign buyers of its properties, followed by Indians and Russians, in the first half of 2024 because demand remains strong.
“The main reasons for investing in Dubai include the city’s great location between Europe and Asia, tax-free property policies, flexible payment plans, excellent rental returns, and strong value growth in terms of return on investment (ROI),” Sean McCauley, chief executive of Devmark, said.
Positive outlook for property prices:
Dubai property prices are expected to keep rising because more buyers want to purchase.
“Prices will keep growing in 2025 and well into 2026 because Dubai is much more affordable compared to other big cities,” and it offers a “much better service and a much better way of living than any of the global cities,” said Mr. Sajwani.
Average property prices in Dubai reached Dh1,473 per square foot as of October 2024. In cities like London, New York, or Singapore, average prices are much higher, over Dh2,500 per square foot, making Dubai a cheaper choice to buy property, according to a recent report from Better Homes.
Not having enough homes available is also helping the market.
“The time from launching a project to handing it over takes three to five years. So it takes time for new homes to be available. Right now, there aren’t enough homes in the market,” Mr. Sajwani said.
About 36,000 new homes, including villas and apartments, are expected to be available by the end of this year, according to a recent report from ValuStrat. New supply is expected to increase to 46,000 next year.
Mr. Sajwani said Damac will keep starting new projects to take advantage of the rising demand. This year, they launched about 12,000 new home units and plan to release a similar number next year.
Last month, Damac started the Damac Islands development in Dubailand and sold more than 3,000 units in less than 10 hours, with sales totaling Dh10 billion, according to the company.
Partnership with the Trump Organisation:
Damac, which built the Middle East’s only Trump-branded golf course in Dubai, is willing to work with the Trump Organisation again on new projects.
“If the right opportunity comes up, we are more than happy to work with our trusted partners, whether it is the Trump Organisation or any other partners,” Mr. Sajwani said.
The Trump Organisation, owned by the president-elect Donald Trump, is teaming up with London-listed Dar Global to develop new projects in Oman, Dubai, and Saudi Arabia. It plans to expand more in the region with new projects, its executive vice president Eric Trump told The National last week.
Buying other companies:
Damac will also look for chances to buy other companies, “but they have to be at the right price, and the deal has to make sense,” Mr. Sajwani said.
“It can be in any sector. In 2020, we bought Roberto Cavalli, which is a fashion brand. So we’re open to any sector as long as we think we can add value to the business, drive the business, and grow the business.”
Mr. Sajwani is also the chief executive and co-founder of Amali Properties, which started its first project, Amali Island, worth Dh2 billion within The World Islands off the coast of Dubai earlier this year.
The project, which has 24 villas, is almost sold out except for one villa and is expected to be ready in the first quarter of 2027.
