UAE Real Estate Market on the Rise: What’s Driving Growth?

The real estate market in the UAE is expected to grow a lot in 2025. This growth is happening because more large investors are becoming interested in the market. Experts have noticed that the types of investors are changing, with many big investors showing more interest in the UAE and nearby countries. Matthew Green, from CBRE MENA, said that many of these big investors are looking for new places to put their money, especially in markets that are safe and give good returns.

The increase in these big investments is happening at the same time as more money is being invested in real estate projects. Most of this money is coming from banks in the region, but now more international companies are also putting their money into the market. This is a sign that there might be a change in how real estate projects are funded. More partnerships are being formed to share the costs and risks, especially for office buildings and factories.

Even though there are some problems in the world, like higher interest rates and less money being available in other countries, the UAE’s economy is still strong. This makes it an attractive place for investors. Green pointed out that even though the world is facing tough times, the UAE still offers good returns compared to many other countries.

Different Types of Investors

The real estate market in the UAE is attracting all kinds of investors, including family offices and Sovereign Wealth Funds (SWFs). Bas Kooijman, CEO of DHF Capital, explained that family offices are more interested in the UAE now because of the country’s tax benefits, stability, and good returns in real estate. Sovereign Wealth Funds are focusing on buying high-quality properties that will make money for a long time. This is making the UAE more popular as a place to invest for the future.

Developer Plans for 2025

Farhad Azizi, CEO of Azizi Developments, said that the company plans to deliver many more homes and commercial spaces by 2025. They expect to see an 80% increase in the number of buildings completed, according to data from the Dubai Land Department. This shows that Dubai is working hard to grow and develop, which will help meet the increasing demand for properties.

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Azizi Developments is adjusting its projects to fit what the market needs. Their big project, the Riviera, is a mix of homes, shops, and places for entertainment. They are also working on luxury developments like Azizi Venice and Burj Azizi, which are meant for wealthy people. However, Azizi Developments is also facing some problems, like rising construction costs and not having enough workers. To solve these issues, they are buying materials directly from suppliers, which helps them save money.

Other developers, like Acube Developments, are also having trouble getting enough building materials. Ramjee Iyer, Chairman of Acube Developments, said that the fast growth of real estate in Dubai has caused a shortage of essential materials like concrete and skilled workers. Acube is working with suppliers to make sure they get the materials they need.

KASCO Developments, another company in Dubai, focuses on planning early in the process. Mustafa Al-Kaissi, Chairman of KASCO, explained that by deciding on the designs of buildings early, they can place orders for materials ahead of time, which helps avoid problems with rising building costs.

Economic and Population Trends

Real estate deals in the UAE were worth more than $148 billion in the first nine months of 2024, with investments totaling more than $102 billion, according to the Dubai government’s data. Kooijman said that this growth is happening because of smart rules, good infrastructure, and a stable economy. Another reason for this growth is that the population in the UAE is increasing. In Dubai alone, the population grew by 1.4% this year, reaching more than 3.6 million people. This growing population is increasing the demand for homes and rental properties.

Sustainability and New Ideas

Developers in the UAE are focusing more on being environmentally friendly and innovative. They want to meet the needs of modern buyers by adding green features to their buildings and making workspaces that can be adjusted as needs change. Yogesh Bulchandani, Founder and CEO of Sunrise Capital, said that developers should focus on making their projects more sustainable by using green materials and designing buildings that can serve many different purposes.

Iyer agreed, saying that in the future, many developments will focus on being green, using new technology, and planning for the future. Al-Kaissi also mentioned that using natural materials and adding green spaces to buildings will help create calm, peaceful living areas.

Looking Ahead to 2025

As the UAE real estate market continues to grow into 2025, experts expect it to stay on its upward path. Developers and investors are hopeful about the future, and they predict balanced growth in homes, office buildings, and mixed-use spaces. Young people, especially Gen Z, are starting to influence the market. This generation cares about sustainable living and wants modern homes in central locations.

Gen Z is expected to prefer smaller apartments that are friendly to the environment and located in the heart of the city. They are also interested in co-living spaces, where they can share homes with others, which fit their values of sustainability and modern living.

In conclusion, the UAE’s strong economy, smart rules, and focus on new ideas will continue to help the real estate market grow. Developers and investors are ready to take advantage of the chances that are ahead, especially as they focus on building more sustainable, tech-driven developments that meet the needs of modern people.

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