Tenants are increasingly shifting to ownership due to a surge in rental rates amidst a big increase in population.
Dubai’s Housing Market Sees Significant Drop in Listings as More Buyers Enter the Market
The availability of homes for sale in Dubai has dropped by 30% in 2024, with the prime market witnessing an even steeper decline of over 50%. This shift comes as more end-users invest in properties to counter rising rental costs, according to insights from real estate consultancy Knight Frank.
“We have observed an increase in genuine end-users rather than speculative buyers who typically drive market cycles. As a result, there has been a notable 30% decline in homes listed for sale across the city last year, while prime markets recorded an even sharper 52% reduction in available properties,” stated Faisal Durrani, Partner and Head of Research for MENA at Knight Frank.
A trend reported earlier suggests that soaring rental rates and Dubai’s growing population in the post-pandemic era have encouraged tenants to transition into property ownership.
Market experts at Asteco highlighted that Dubai’s residential rental market experienced significant growth in 2024, with apartment and villa rental rates climbing by approximately 2-3% in the fourth quarter alone.
Meanwhile, official figures indicated a 30% month-on-month decline in rental contract renewals this February, suggesting a notable shift from renting to homeownership, which has led to a reduced number of properties available for purchase.
Dubai’s Growing Population and High-Net-Worth Migration Fuel Demand
Dubai’s population continues to expand in 2025, adding approximately 27,000 new residents in the first two months of the year, bringing the total to 3.852 million.
Knight Frank’s research further revealed that luxury real estate listings have significantly declined. The number of properties in the $10 million-plus segment fell by 40%, dropping from 4,119 to 2,491 homes in the last year. Meanwhile, listings in the $25 million-plus bracket saw an even steeper decline of 85%, with only 86 homes available, down from 583. The influx of millionaires and ultra-high-net-worth individuals choosing Dubai as their residence has contributed to this decrease.
According to Petri Mannila, Partner for Prime Residential at Knight Frank, the sustained demand for high-end properties combined with limited supply has continued to drive luxury real estate prices upward, reaching AED 6,627 per square foot in Q4 2024.
“Dubai’s luxury market has further solidified its reputation as a global safe haven for premium property buyers. Last year, the market for $10 million-plus homes achieved another record-breaking performance, with 435 transactions recorded in 2024. Notably, 153 of these were completed in Q4 alone, marking the highest single-quarter sales volume for this segment on record,” Mannila added.
Strong Development Pipeline to Address Housing Supply
Knight Frank estimates that Dubai currently has 302,880 residential units under construction. Of these, 80% will be apartments, while the remainder will consist of villas and branded residences.
This supply pipeline translates to approximately 60,576 new homes per year over the next five years—significantly above the historical average of around 36,000 completions annually. However, the market has seen a 30% lag in the completion of promised projects over the long term. In 2024, just over half of the expected 60,000 new homes were successfully delivered.
According to Cavendish Maxwell, Dubai’s housing supply remains robust, with 243,000 units scheduled for completion by the end of 2027. Jumeirah Village Circle is expected to lead this expansion, helping to stabilize property prices and rental rates while reducing pressure on tenants.
“The resilience of Dubai’s real estate sector is built on strong long-term fundamentals. The city’s ability to attract global capital, coupled with strategic regulatory policies, ensures that demand remains steady across all property segments,” commented Farooq Syed, CEO of Springfield Properties.
