Dubai is expected to lead global prime residential price growth this year. Forecasters predict that our Emirate’s luxury real estate segment will build on the substantial capital value increase of 6.8% recorded in 2024 to achieve growth of up to 9.9% in 2025. This places Dubai as the highest-ranking of the 30 destinations listed in the Savills Prime Residential World Cities Index.
Momentum of this magnitude has caused some onlookers to express concern that the pace of expansion in Dubai’s ultra-luxury real estate market might be unsustainable, dubbing it a ‘boom’. Personally, I think they are wrong. My view is that we are witnessing market maturation, which, in turn, will drive stability, sophistication and long-term investor confidence.
Despite limited supply, ultra-luxury transaction volumes are continuing to climb, as investor engagement with (and confidence in) Dubai’s prime real estate market moves from strength to strength. For example, 590 sales of properties worth over AED 20 million were registered in Q1 2025, compared to 480 in the corresponding period of last year. Almost 60 of these properties sold for AED 50 million or more.
Figures like these reflect Dubai’s status as a global leader in the premium property space. With capital flowing in from around the world, our Emirate is going toe-to-toe with a range of more established markets, including Seoul, London, and New York. So, why am I so sure we are witnessing the maturation of our ultra-luxury segment, rather than a boom? Here’s my take…
Supply is controlled
Market maturity typically emerges when established developers greenlight demand-led and well-considered projects. This is exactly what we are currently seeing in Dubai’s ultra-luxury segment. Contrast this situation with the pre-2009 landscape, which was characterised by rapid construction and speculative investments. Prices rose sharply, but the global financial crisis of 2008 reversed this trend – and dramatically so.
Ever resourceful and forward-thinking, Dubai’s leaders introduced a suite of robust measures and regulations to future-proof our Emirate’s property market. Fast-forward to 2025, and ultra-luxury development is being driven by tangible demand rather than ambitious projections. Developers are catering to wealthy buyers and investors, and oversupply is not an issue. The finite availability of prime land is also capping unfettered development, another common trait among mature markets.
Last year alone, Dubai welcomed 6,700 millionaires, cementing its position as a global wealth hub and driving additional demand for ultra-luxury residences. In response, developers launched more than 200 residential projects, adding nearly 50,000 units to the off-plan market. Yet as more high-net-worth individuals (HNWIs) seek to put down roots in our Emirate, demand for prime property will continue to increase. It is therefore encouraging to see that high-end brands such as AHS Properties are taking a measured approach to development, rather than chasing short-term gains.
Price growth is rational
Market booms tend to be associated with erratic or exponential price rises. This is not the case in Dubai’s ultra-luxury segment today. While prices have witnessed impressive growth, they’re still significantly lower than in cities like London, New York or Hong Kong, suggesting room for genuine value appreciation.
That’s not to say that maturing markets do not witness substantial price increases. However, such rises are backed up by existing fundamentals rather than unfounded predictions. For instance, limited inventory in Dubai’s ultra-prime neighbourhoods makes higher price points rational. What’s more, the strategic nature of the projects currently being launched is likely to underpin prolonged and calculated appreciation over the long term.
The types of projects planned in Dubai also play an important role in this regard. AHS Properties, for example, topped our Emirate’s $5-10 million real estate segment last year thanks to its unwavering commitment to quality, amenities and a world-class customer experience. And while my team and I are pleased to be leading the market, our city is home to a variety of other outfits that are equally committed to responsible development.
Investor profiles are shifting
Foreign capital inflows from investors seeking security and stability are also indicative of maturing markets, and Dubai’s investor-friendly environment has certainly bolstered price points. HNWIs usually view property purchases as more than an investment asset. In my experience, the majority of wealthy buyers are serious about making Dubai their home.
Today’s luxury property hunters are motivated by the lifestyle Dubai offers, and they are willing to pay a premium to get it. Market booms are characterised by speculative investors, whereas – in the vast majority of cases – those purchasing residences in our Emirate’s ultra-luxury segment at present are in it for the long haul. The fact that government entities are simultaneously working to encourage stability through stricter escrow legislation, regulatory transparency and attractive visa options is only likely to facilitate maturation.
Ultimately, Dubai’s prime property market continues to exhibit unparalleled levels of demand and growth, so it’s not entirely surprising that some commentators are crying ‘boom’. However, anyone willing to look a little closer will see that momentum in this space is being driven by rock-solid fundamentals.
In my opinion, our Emirate is not just an investment hotspot; it’s a global benchmark for quality-led development. Dubai’s ultra-luxury real estate segment fully deserves the attention it is attracting, and – most importantly of all – it is here to stay.
