Dubai’s rapidly growing population is creating strong demand for residential properties in early 2025, prompting developers to launch new projects at an accelerated pace.
The combination of overall population growth and increasing migration of high-net-worth individuals (HNWIs) has created significant need for quality housing that aligns with changing preferences of buyers and renters.
Data from the Dubai Statistics Centre shows the emirate added 33,057 new residents in both January and February, bringing the total population to 3.89 million by February 2025. If this growth continues at the current rate, Dubai could welcome over 204,500 additional residents by year-end, further strengthening its position as one of the world’s most desirable places to live and invest. This population surge is intensifying an already robust demand for housing.
This consistent population increase naturally translates to sustained housing demand, creating a dynamic and competitive property market. Dubai’s ability to attract new residents at this scale demonstrates the strength of its economy and its role as a global hub.
Housing Demand Outpacing Supply
Industry experts emphasise that Dubai’s residential sector continues to benefit from population growth, which serves as a powerful demand driver while maintaining the city’s reputation as a globally competitive real estate market.
Combined with Dubai’s ongoing initiatives to encourage relocation and investment, these factors will help sustain market growth throughout 2025.
Based on Dubai’s average household size of four people, the population growth in just the first two months of 2025 creates demand for approximately 51,126 additional housing units this year. The residential market appears well-positioned to meet this demand, with existing and upcoming projects continuing to attract diverse buyers and investors seeking long-term value.
The relationship between population growth and real estate demand in Dubai is well-established and expected to continue. With ongoing interest from both end-users and investors, the market remains vibrant, offering various opportunities across different price points and property types.
Luxury Home Shortage
The intense demand has created a significant shortage of luxury properties in Dubai. The number of homes available for sale at $10 million or more decreased by 40 percent to just 2,491 last year. Even more dramatically, properties available at $25 million or more fell by 85 percent to only 86 properties in 2024, according to Knight Frank.
This shortage comes as the UAE has established itself as the top destination globally for wealthy individuals, attracting more than 6,700 millionaires last year, as reported by migration consultancy Henley & Partners.
Overall, Dubai house prices increased by 19 percent last year, reaching AED 1,685 per square foot, with apartment prices specifically rising by 18.9 percent to AED 1,640 per square foot.
Across Dubai, available homes for sale have decreased by 30 percent, with prime areas experiencing an even more significant 52 percent reduction in available properties.
