Analysis of the luxury property market in Dubai

What is the luxury real estate market in Dubai like?

Currently, the UAE luxury residential market is experiencing a period of unprecedented growth and maturity. While many global financial centers are struggling with a slowdown, Dubai recorded 226,000 transactions in 2024 with a total value of AED 761 billion, representing a 36% increase in volume year-on-year. The city has become a global leader in the ultra-premium segment, where the number of property sales worth more than $10 million has nearly doubled in recent years, surpassing the results of London and New York.

Prices of luxury apartments and houses in Dubai – what you need to know

Many investors ask themselves: What are the current prices of luxury apartments and houses in Dubai? Although the market is diverse, data for 2025 indicates that the average prices of luxury apartments and houses in Dubai in the most prestigious locations reached around AED 38,000 (approx. EUR 9,200) per m², which represents an increase of 11% year-on-year. It is worth noting that in the most exclusive enclaves, these rates can reach up to AED 55,000 per square meter. Nevertheless, compared to other global hubs, Dubai still offers higher value per square foot, while providing an incomparably higher standard of amenities. Knowing the prices is an important factor when calculating the return on investment in Dubai real estate.

Which districts of Dubai offer the most expensive properties?

If you are wondering which districts of Dubai offer the most expensive properties, the answer leads to key locations that have become synonymous with success and luxury. Dubai's most expensive properties and their value are primarily concentrated in:

• Palm Jumeirah: an artificial island offering waterfront villas and apartments, where prices start at AED 10 million and can exceed AED 100 million.
• Downtown Dubai: the heart of the city with iconic views, where prices for prestigious apartments typically start at AED 2 million.
• Jumeirah Bay and Emirates Hills: often referred to as the “Beverly Hills of Dubai,” they offer ultra-luxury properties with starting prices of AED 20 million.
• Dubai Marina: Dubai's tourist center, where short-term rental apartments starting at several million AED can provide a significant return on investment.

Investing in Dubai's luxury real estate: Villas or apartments?

Customers often ask one of the key questions: Which luxury properties are worth investing in? The choice depends on your investment goals. Dubai's luxury apartments and villas offer different benefits. Villas have seen spectacular price increases – 26% in 2024 and as much as 94% since the beginning of 2020 – due to limited supply. In turn, Dubai's premium apartments are the driving force behind the market, attracting investors with high rental yields averaging 7-8% and up to 12% in select locations. Investments in exclusive off-plan (under construction) properties are very popular, accounting for approximately 63-71% of transactions, thanks to flexible payment plans and high capital growth potential. It may also be useful to answer the question where is the best place to buy property in Dubai.

What are the trends in Dubai's premium real estate segment?

Dubai's contemporary high-end segment is no longer just about gold and marble. Current trends in Dubai's premium real estate segment focus on three pillars: sustainability, technology, and wellness. Smart IoT home systems, green certifications (e.g., LEED), and spaces dedicated to the well-being of residents, such as private spas and bioclimatic gardens, are becoming the norm. Branded residences – apartments bearing the names of luxury fashion houses or hotels – are also extremely popular, fetching prices 15-25% higher than standard premium properties.

Demand and supply of luxury real estate and the impact of foreign capital

The key question for understanding the market is: How is the demand for luxury real estate changing in Dubai? Demand is driven by the mass migration of millionaires – prices of luxury apartments and houses in Dubai have skyrocketed, with around 6,700 wealthy residents arriving in the city in recent years alone. We have already written about how much real estate costs in Dubai. At the same time, the supply and demand for luxury real estate remain out of balance: the number of available luxury villas has fallen by 65% year-on-year, putting pressure on prices to rise further. Another important question is: How does foreign investment affect Dubai's luxury market? The government's stable policy, including no income or capital gains tax, makes Dubai a safe haven in uncertain times. Programs such as the Golden Visa, granted for investments over AED 2 million, further encourage investors from Europe, Asia, and the Americas to invest capital in the region.

Questions and answers (FAQ)

• Is investing in real estate in Dubai safe for foreign investors?

Yes, the market in Dubai is highly transparent thanks to the regulations of the Department of Land and Real Estate (DLD) and the escrow system. In addition, freehold ownership for foreigners has been available in key luxury districts since 2002.

• What rental yields can be expected in the premium segment?

The average rental yield in Dubai is around 7-8%, which significantly exceeds the results of London (2.4%) or New York (4.2%). In the most popular districts, such as Palm Jumeirah and Dubai Marina, profitability can reach up to 12% for short-term rentals.

• What are the price forecasts for the coming years (2025–2026)?

Experts from around the world predict a continuation of the upward trend. In the most prestigious areas, capital growth of 5-8% per annum is expected, and in some luxury segments, growth could reach as high as 10%, which is a great argument for investing your capital in this direction.

An analysis of the luxury real estate market in Dubai clearly shows that this is a place where innovation meets financial security. Our real estate agency, Two Continents Estate, supports clients in navigating this dynamic market, helping them find properties that are not only a home but also an effective investment. In addition to real estate, Two Continents also offers travel packages trips to Dubai, accommodation rentals in Dubai, attractions in Dubai, and useful articles about the UAE, such as A Guide to Dubai.