Today I will reveal the burning topic of how things are going in the real estate market in Dubai in 2025. Is it overheated or not overheated? To buy or not to buy? What are the advantages? What are the disadvantages? There is an opinion that the Dubai market is overheated, and prices are about to collapse, and everything is gone. In fact, let’s look at the real numbers and see if that’s the case.

Dynamics of the Dubai real estate market over the past 15 years

Take a look at this chart. It shows the dynamics of the market over the past 15 years in terms of the number of transactions in all areas of the city. Obviously, the market has grown several times since 2019, and it does not stop growing. Pay attention to the graph that shows the data for 2024. These are not just beautiful numbers — these are real data and statistics on current transactions, which are then used to forecast for the coming year. Accordingly, we see that the growth continues. Now you can see a chart of price changes in terms of transaction volume in monetary terms. It’s all the same.

Now take a look at the chart showing the price per square foot. Based on these data, we can reliably conclude that prices continue to rise, the market is developing, the number of transactions is increasing, and the volume of this market in monetary units is growing.

Return on investment when buying property in Dubai

Despite the fact that prices have increased significantly and the threshold for entering the market has also increased, it is important to pay attention to the fact that the return on investment, that is, your profitability, has not decreased. This is due to the fact that the cost of rent is also increasing.

Therefore, it is important not only to consider how much money you need to invest, but also how much interest you will be able to return within a year. In this regard, it does not matter that the market price has increased. It is still a very profitable investment.

Annual rental payback in Dubai

For example, you can get 7-8% per annum net from a long-term lease. While in Russia and Europe, this figure is only 2-3% per annum. For example, yesterday I passed by a house that I really liked in Moscow, and decided to go to the TSAN website to see how much the apartments cost there. As a result, I found that apartments in this area cost an average of 55 million rubles for a two-bedroom apartment with an area of 60 square meters.

I was wondering how much it would cost to rent such an apartment. I checked the rental price of this apartment on the same TSAN website and realized that it is about 120 thousand rubles per month. A simple calculation makes it clear that the payback period for such an apartment exceeds 40 years. When I evaluate the profitability of properties in Dubai and see that the payback period exceeds 16 years, I understand that this is an abnormal situation, and I will not offer such options to my clients. The payback period should be a maximum of 16 years for a long—term lease, and ideally 12-13 years.

Who is buying a property in Dubai. The most active investors are Indian citizens

In fact, this market has always been incredibly international. For example, in 2020, buyers from Russia ranked sixth in the list of the largest buyers of real estate. In 2022, buyers from Russia moved to positions between the second and third places.

The largest market is the Indo-Pakistani one. Historically, for many years it has been Indian clients who buy the most real estate in this region. In addition, this market is very popular with the British, who occupy the second place among buyers. Dubai also has a large presence of people from China, Canada and various Middle Eastern countries who also purchase real estate.

Therefore, one should not think that the cooling of Russian demand in any way significantly affects this market. If you want to find out which areas are currently profitable for investment, but you only know about an area like Dubai Marina, leave a request. The link to my website is in the description. I’ll give you a consultation and tell you more.

Taxation of individuals in the UAE and Dubai

I would like to remind you once again that Dubai has extremely favorable taxation. Personal income is not taxed. Accordingly, if you have bought an apartment and are renting it out, you will take the entire amount for yourself. If you bought an apartment and resold it for more in six months, then you also take the entire amount for yourself. You have no restrictions; no taxes arise. This has a very positive effect on demand and on how the market is developing.

For Europeans, this factor is usually the key. You know what taxes are in Europe. Therefore, this market is becoming very attractive to Europeans. Their share continues to grow, which also supports demand and prices.

Expats allow the economy to grow

It is extremely important for the authorities of the United Arab Emirates that demand does not cool down. It is expats who allow the economy to grow. The indigenous population of the United Arab Emirates accounts for only 18% of the total population in the country. Therefore, if expats decide to withdraw their money, the economy will come to an end. In this regard, the government is very worried and takes care that the market develops and prices do not fall anywhere. This is necessary in order for investors to continue to be interested in entering this market.

How often can a landlord raise the rent in Dubai?

For example, it was recently allowed to raise rental prices by 20% after the contract was extended for a second year. Accordingly, previously, if you bought an apartment and rented it out, you could raise its price by no more than 10% every year. Now, starting from the third year, you can raise the rent by 20%. This is very good for investors, because rents are growing rapidly. Thus, income and return on investment have increased as leases have become more marketable, even on old contracts.

Disadvantages of the Dubai real estate market

Now let’s move on to the cons. There is extremely high competition in Dubai. If you want to purchase a liquid object, you need to stand in line. You need to participate in lotteries. It is also important to work with a broker so that he can add you to the list and you can book a unit before the official start of sales.

That is, really attractive liquid objects are sold in a matter of hours, even if it is a 60-storey skyscraper. Therefore, it is important to understand that it is not so easy to buy a good object.

The volatility of the real estate market in Dubai

And this is another reason why you need to be very careful about who you work with and choose a broker, taking this nuance into account. Of course, there is market volatility, and growth is followed by a plateau, and there may be some kind of decline. This is absolutely normal. The Dubai market may also experience volatility. There’s nothing unusual about that. And the good thing about real estate is that if there is a downturn in the market, you just don’t need to sell the property at that moment. Just leave it and wait for the market to grow again. But if it suddenly happens that you need to sell the property, well, then you will have to sacrifice your income and sell it, for example, at the price at which you bought it. There’s nothing you can do about it.

The cheapest apartments in Dubai. What do they look like and what is included in the price

Dubai has a fairly high entry threshold. The fact is that economy-class housing is not being built in this city in the usual sense. Even the most budget-friendly option, and I remind you that prices start at $150,000, includes security, a swimming pool, a gym, and beautiful landscaping.

The apartment will be finished, it will already have a kitchen installed, and the price includes a parking space. That is, even the most budget-friendly option in Dubai is a very strong premium class by Russian standards. Therefore, if your budget is less than this amount, you simply won’t find anything suitable in Dubai. Unfortunately, there are no super simple options provided here.

However, there is some good news. All developers offer interest-free installments. Thus, you can enter into a deal with only 30-35 thousand dollars, and then pay in installments during the construction period. In some cases, you will have a couple more years after the house is ready to complete the installment payment.

Which areas of Dubai are the best selling properties?

Let’s look at the statistics on which areas sold best in 2023. So, look at this chart. What do we see here?

In terms of sales in 2023, the Jumeirah Village Circle area, abbreviated as JVC, took the first place. The next area is Dubai Marina. Dubai Marina is probably the most famous area, which is often found on postcard views, and you’ve no doubt heard of it. The next area is Business Bay. It is located near Downtown Dubai, meaning it actually surrounds the area. The Business Bay is in fourth place. This is the area in the center of which stands the Burj Khalifa. In fifth place, we see the Dubai Creek Harbor area.

Let’s take a closer look at each of these areas.

Jumeirah Village Circle (JVC). A modern residential area located in the central part of New Dubai

Let’s start with JVC. JVC is a residential residential area that is located near the Marina and the famous Palm Tree. This is a fairly popular residential area. It’s green, it’s been around for a long time, so there’s everything you need to live there: supermarkets, cafes, hairdressers, and so on. This is a fairly rare situation when you have everything you need within walking distance in Dubai. As a rule, people have to go to the pier. By the way, JVC has its own pier. This area is distinguished by its relatively low cost.

As we can see from our statistics, in 2023 the average bill for housing here was 836 thousand dirhams. Let me remind you that the US dollar is directly linked to the dirhams. Accordingly, the exchange rate of the dirham has not changed for many years. When we talk about profitability and prices, it is always a fixed rate. It is 3.65.

That is, if we take the amount in dirhams, we need to divide it by 3.65. This is the bank rate, and the exchange rate is slightly higher. Focus on 3.65 and you will receive the amount in dollars. The JVC area is for those with a small budget, because it is there that you can buy a good apartment in a high-quality house for a starting budget of 150 thousand dollars.

Such a house will usually have a swimming pool, gym, parking space, and the apartment will be fully finished. At the same time, there is a very good payback, and it is higher than the average in Dubai. Through long-term rentals, on average, people earn 7-8% per annum in net income there, after they have deducted all their expenses.

Therefore, if you have a small budget, pay attention to this area. As we can see from the official report, prices in JVC have increased by 26.7% over the past year. This is a very good result, and it is above the average in Dubai. Therefore, be sure to consider this area.

Is Dubai Marina an overrated area?

The next area we’ll talk about is Dubai Marina. This is the most popular area. There are a huge number of requests for real estate here. It all starts with the fact that people want to buy an apartment in Dubai Marina. Friends, this is not the only neighborhood that exists in Dubai. If you really want to live in Marina, be sure to consider it. But don’t forget that there are other options.

Look at the chart. The average price of an apartment in this area last year was 2.5 million dirhams. At the same time, as you can see, prices there have fallen by almost 1%. This happened because in 2022, many people from Russia, experiencing high demand, actively bought units in the Marina and were ready to pay any money. As a result, prices there have increased dramatically.

As the chart shows, then prices started to fall. This high demand has overheated the real estate market in the area, which is directly related to its popularity among the Russian-speaking audience. Therefore, the international demand in Dubai was slightly disrupted here, since many investors from Russia came to this area.

They contributed to the overheating of prices, and we are still seeing a decline. As for the profitability in the long term, it is not very high there, precisely because the apartments were bought at an inflated price, and the rental price remains on the market.

However, if you like Marina and you want, for example, to come here yourself or rent an apartment for daily rent, this is a good option. The daily rent here is efficient, the apartments are well and expensively rented, and the occupancy rate is high.

Business Bay. One of the trendiest residential and business centers in Dubai

Now let’s look at the Business Bay area. This is a good option for investors. The average price of an apartment in this area is one and a half million dirhams. We can see that the price has increased, but only slightly. Nevertheless, Business Bay is an interesting area because it is still actively being built up. Because of this, it is growing organically in price, even though there is a certain bias, and the current price growth has slowed down slightly, as they had been rising more actively before.

Despite this, prices in Business Bay will continue to rise because the area is developing dynamically, and there are still many construction projects and vacant lots. Unlike Marina, where there are practically no vacant lots, there is a potential for price increases in Business Bay, as the development of the area continues.

Therefore, a Business Bay can be considered if you have an average budget and you are looking for an option that will work well on a long-term basis. In addition, the short-term rental option works well here, as people come to the area not only for beach holidays, like in the Marina, but also for business, shopping, and so on. It is also worth noting that Business Bay is just a stone’s throw from Downtown and Dubai Mall.

Downtown. The Burj Khalifa is located here. The very center of Dubai

Let’s move on to the Downtown area. It is also one of the most famous areas, thanks to the Burj Khalifa. The situation here is similar to the one in the Marina area. The average price for a Downtown apartment is almost 2.6 million dirhams, and we see that the price has also dropped by 2%. Thus, the situation is absolutely similar to that observed in Marina.

Therefore, if you want to buy an apartment in this part of the city, pay attention to what is around. In addition, it is worth noting that this area will work well for daily rent.

Dubai Creek Harbour. New coastal area 1 minutes from the center of Dubai

And the last one on our list is Dubai Creek Harbor.

Dubai Creek Harbor is a huge project by developer Emar. This developer is the most famous and largest in Dubai. Among his achievements is the construction of the Burj Khalifa.

The project includes the development of the area for many more years. Aimar aims to make this area a new downtown. There is already ready-made real estate there, as well as many facilities under construction and will continue to be built.

We are currently seeing a 15.2% increase in prices compared to last year. This is a good indicator. I noticed that earlier prices in this area were not growing so well, but now they have started to accelerate. The demand for housing has increased here, and the secondary market is actively growing.

Therefore, we recommend considering this area at the moment.

In addition, I want to tell you about several other areas that are worth paying attention to. Despite the fact that they did not enter the top in terms of sales, these places are really cool. Their absence from the top is explained by the fact that they are more compact and it is difficult for them to compete with such large areas.

Dubai Hills. The “green corner” in the city center. From the developer Emaar

Pay attention to the Dubai Hills area. I really like this area because it is conveniently located. It is residential and sleeping, that is, it is not located in a tourist location, but at the same time it can be reached anywhere in the city in just 15 minutes. That’s why the residents really appreciate this area.

Dubai Hills is being fully developed by developer Emar, which makes it an integrated development. It has a very pleasant infrastructure, a large modern landscaped park, and by and large there are no more parks like this in Dubai. This area is rapidly gaining popularity, and property prices are rising there.

Nevertheless, the area still has huge potential, as it is being built further. The more the area is ready, the closer the prices are to the final ones, which are already stabilizing and will not rise significantly above the market.

The average cost of an apartment in Dubai Hills was 1.7 million dirhams. Growth was recorded at the level of 3.7%. The fact that we see a slight increase is generally not bad, as it means that prices have not had time to overheat yet. Therefore, if you buy an apartment there now, you will have time to take advantage of the growth rates that will ensure you a good payback.

City Walk — “a city within a city” by MERAAS

Another area is Wolf City. This is a residential area, the developer of which is Miraas. It is a complex building.

City Wolf is very pleasant, fashionable and low-rise. It is only 10 minutes from Burj Khalifa and downtown. This area is great for renting, and prices are rising very intensively here. Nevertheless, there is still potential for growth in the City of Volk.

Just a week ago, we conducted a large study for a client who is interested in investing in this area. There is also another cluster that is still under construction. This project is called Central Park. We carried out calculations for Central Park, and we got very positive figures.

Of course, we are guided by real benchmarks, which gives confidence in the data obtained. Therefore, we strongly recommend that you consider investing in City Wolf. The average cost of an apartment in the area is about 4 million dirhams, and prices have increased by 36.8%.

Palm Jumeirah. One of the most prestigious areas of Dubai, a popular tourist attraction

And finally, let’s talk about the famous Palm Jumeirah. Despite the fact that this area is very famous and has existed for a long time, there is still a lot of potential in it.

The average cost of an apartment in Palma is 4 million dirhams, and prices have increased by 7.4% in recent years. This area is ideal for short-term rentals, and it is very pleasant to live there. The Palm has many options, including its own beaches.

In addition, investments in villas here are very profitable, although they require significant investments. We are talking about an amount starting from 40 million dirhams, but this is a really powerful investment that is growing well in value. Flipping and other investment strategies are also possible in this area.

Therefore, if you have the opportunity to allocate such a large budget, the Palm Tree option will be an excellent solution for you. As you can see, there are many different areas in Dubai, and you should not limit your search to just the Marina or Downtown. Be sure to pay attention to other areas and use all the opportunities that are currently available on the market.