According to JLL’s Middle East and Africa Market Review and Outlook 2025, the UAE’s real estate sector is being propelled by limited supply, infrastructure development, and growth in alternative assets like last-mile logistics and data centers. Dubai’s residential market concluded 2024 robustly, with a 32% increase in sales transactions totaling AED 367 billion. Off-plan properties dominated, comprising approximately AED 223 billion or 60.7% of total transactions. Developers responded to this demand by launching around 157,000 units in 2024, the highest annual figure per REIDIN data. The rental market saw a 15.7% year-on-year rise in lease rates, though the slower pace suggests potential stabilization in the near term.
In early 2025, Dubai maintained strong activity, with over 13,500 transactions in January and an additional 15,300 in February, as reported by Emirates NBD Research. Notably, Jumeirah Village Circle (JVC) accounted for 8% of February’s sales, leading demand for both ready and under-construction properties. Apartment transactions grew by 14% month-on-month, while villa and townhouse demand increased by 10%. February also saw the launch of 7,190 new units, following over 6,500 in January. Capital values for both apartments and villas/townhouses rose by an average of 2% month-on-month.
The UAE’s non-oil GDP grew by 4.7% in 2024 and is projected to accelerate to 4.8% in 2025. Taimur Khan, Head of Research MEA at JLL, highlighted that stabilizing inflation and a strong labor market are driving robust real estate demand in Dubai and Abu Dhabi. He noted that government strategies to attract investment have bolstered GDP growth. Khan anticipates that converting qualified non-freehold properties and new infrastructure projects will further stimulate real estate development in 2025.
Despite a regional slowdown in construction projects in 2024, the UAE led with 47% of project awards, totaling $34 billion. The residential and mixed-use sectors were particularly strong, with $28.3 billion and $4.6 billion in awards, respectively. The UAE also accounts for 20% of upcoming construction projects in the region. Gary Tracey, Head of Project & Development Services UAE at JLL, emphasized the market’s resilience amid rising construction costs and the importance of cost control and innovation for sustainable growth.
Tender price inflation (TPI) in the UAE averaged 3% annually in 2024, similar to 2023. JLL forecasts a TPI of 2.5% for 2025, with a potential variance of +/- 2%, influenced by factors like lower interest rates, stabilizing commodity prices, and normalized supply chains, balanced against market capacity constraints and contractor sentiment.
Abu Dhabi’s office market experienced strong demand in 2024, primarily from government-related entities, with 47,615 office rental registrations—a 30.8% year-on-year increase. With limited new supply of 172,940 square meters expected, rental rates, especially for Prime and Grade A spaces in central locations, are likely to rise in 2025. In Dubai, approximately 122,000 square meters of new Grade A office space is anticipated in 2025, spread across areas like DIFC, Dubai Internet City, Dubai Silicon Oasis, and Sheikh Zayed Road.
