Dubai real estate investors are shifting their focus to affordable luxury as rental yields and price rises keep demand high.
The UAE’s cheap luxury real estate sector is rising, with transaction values expected to rise 34% by 2024, primarily due to off-plan properties.
This growing trend appears to be sustainable, with predictions expecting 5-8 percent annual price rise and 7% average rental yields by 2025.
Dubai real estate luxury homes
In Dubai’s luxury market, transaction prices for flats in the city’s most desirable districts increased by 26 percent year on year.
This trend is predicted to continue into 2025, with residential property values rising by 5-10%, demonstrating a maturing market that is efficiently balancing supply and demand.
According to industry observers, this impetus stems from increased rental returns, favorable government regulations, and a growing preference for superior yet affordable residential options.
In 2024, Dubai’s real estate market saw over 169,000 property transactions valued at AED488 billion ($133 billion), demonstrating the sector’s strength and endurance.
Developers are reacting with new payment arrangements and sustainability-focused projects, preparing the industry for further growth.
Madhav Dhar, COO and Co-founder of ZāZEN Properties, said: “The affordable luxury segment isn’t just a passing trend; it’s a fundamental shift in Dubai’s real estate landscape. Today’s homebuyers are looking for residences that strike the perfect balance between quality, sustainability, and value.”
Looking ahead, the inexpensive luxury market in the UAE is poised for further expansion. Projections predict that the market will increase at a 2.28 percent annual rate from 2025 to 2029, reaching an anticipated value of AED2.79 trillion ($760 billion) by the end of the decade.
This expansion will be fueled by a combination of robust economic policies, investor-friendly laws, and a strategic emphasis on urban development.
As developers continue to fulfill demand, property releases are expected to expand by 5-10% by 2025, with a focus on this market.
This is consistent with Dubai’s overall objective for affordable luxury construction, maintaining the city’s status as a leading global real estate market.