Dubai’s booming real estate market shows no signs of slowing down — and according to Abdullah Alajaji, CEO and founder of Driven | Forbes Global Properties, property prices in the emirate could double over the next five years.
This bullish prediction follows a record-breaking year for Dubai real estate. In 2024 alone, the city recorded over 217,000 real estate transactions worth AED 526 billion, representing a 38% increase in deal volume and a 27% rise in value compared to the previous year, as per official data.
Still Room to Grow
Despite the impressive performance, Alajaji believes Dubai is still undervalued on the global stage. Speaking during the launch of Driven’s latest report benchmarking Dubai against top-tier global cities, he pointed out that property prices in Dubai remain significantly lower than in cities like New York, Singapore, or London.
“If Dubai property is still trading at around 20% of the value of other global cities, and our rental yields — or cap rates — are double theirs, there’s every reason to believe prices will continue climbing,” he said.
Cap rates, a measure of the annual rental return relative to a property’s market value, are central to Alajaji’s outlook. For instance, a property valued at $1 million generating $50,000 annually in net rent offers a 5% cap rate — a figure that outperforms many established global markets.
Fundamentals Over Hype
Unlike the pre-2008 property surge, today’s price increases are backed by solid fundamentals. “Back then, prices skyrocketed across the board, but rental yields were weak,” Alajaji noted. “Today, rents are rising alongside prices, indicating strong end-user and investor demand.”
This convergence of rental income and capital value suggests a healthier, more sustainable growth trajectory.
Dubai Rising to Tier-1 Status
Driven’s new report, Dubai on the Verge of Tier-1 City Recognition, ranks the city against global heavyweights like London, Paris, Singapore, and Hong Kong across 28 performance indicators. Dubai scored especially high in infrastructure (2nd), international appeal (3rd), safety (4th), and quality of life (4th) — clear signs of a maturing city with global ambitions.
Transaction volume is another standout. Dubai’s real estate transactions in 2024 reached $200 billion, a figure three times higher than London’s, reflecting strong liquidity and investor confidence.
Market Outlook and Investor Strategy
According to Driven’s survey, nearly half of market participants believe property values are fairly priced, while 35% think they may be somewhat overvalued. Only 11% see the market as undervalued — a sign that investor sentiment is largely balanced, not speculative.
Alajaji suggests targeting areas with limited land supply for future growth. “Focus on communities where land availability is constrained — these will likely see the strongest appreciation,” he advises.
As for his own firm’s strategy? The outlook remains confident. “We’re long on Dubai. We believe in the city, we’re invested in its future, and we’re enjoying the journey,” Alajaji said.
Bottom Line: With a unique combination of strong rental yields, rising demand, global positioning, and high liquidity, Dubai is emerging as a serious contender among the world’s leading real estate markets. If current trends hold, doubling of property prices over the next five years may be more than just optimistic — it might be realistic.
