How UAE’s Economy Affects Dubai’s Property Market

Dubai’s property market doesn’t operate in isolation. It rises and shifts in line with broader economic drivers across the UAE. As the country invests more in infrastructure, diversifies its economy, and draws new residents and businesses, demand for property rises.

Economic Growth and Diversification

Dubai’s property market is deeply connected to the UAE’s broader economic performance. As the national economy strengthens, especially across its non-oil sectors, demand for real estate in Dubai rises accordingly.

According to the Ministry of Economy, the UAE’s real GDP grew by 3.8% year-on-year in the first nine months of 2024, reaching AED 1.322 trillion. Notably, non-oil GDP grew by 4.5% to AED 987 billion, now contributing 74.6% to total real GDP, compared to 25.4% from oil-related activities.

Among the non-oil sectors, trade contributed the most at 16.5%, followed by manufacturing (15.1%), financial and insurance activities (12.1%), construction (11.7%), and real estate activities (7.6%).

According to the World Bank, the UAE’s GDP is expected to grow by 4.6% in 2025, with the non-oil sector holding its position as a key contributor to growth, projected to expand by 4.9% in 2025.

This shift toward economic diversification has significantly impacted Dubai’s real estate landscape. Growth across sectors creates employment, supports infrastructure development, and increases housing demand across both ownership and rental segments.

Investor Confidence

Dubai’s global reputation as a stable, well-regulated market continues to attract international property investors, many of whom are drawn by its long-term residency options, tax environment, and ease of ownership.

According to the Public Debt Management Office, over 110,000 new investors entered the property market in Dubai in 2024, marking a 55% increase over the previous year. These numbers reflect the city’s growing appeal, particularly in a global environment where investors are seeking relatively stable, high-yield markets with strong fundamentals.

Tourism and Short-Term Rental Activity

Tourism is another key pillar of Dubai’s economy, with indirect links to the real estate sector. In 2023, the city welcomed approximately 17.15 million international visitors, a 19% increase over the previous year, according to Dubai Media Office. The government aims to attract 40 million tourists annually by 2031, highlighting the strategic importance placed on travel and hospitality.

High visitor volumes contribute to demand for hotels, serviced residences, and short-term rental accommodation. While not always directly reflected in residential sales data, sustained tourism activity supports infrastructure growth and investment in hospitality-related developments, both of which influence broader real estate dynamics.

Population Growth

Dubai’s resident population is expected to reach 4 million by the end of 2025, reflecting the UAE’s broader economic expansion. As the national economy grows, it attracts professionals, investors, and entrepreneurs to the city. This demographic growth fuels the real estate market in Dubai, increasing the demand for diverse property offerings—from studios to luxury villas.

Contributing to Long-Term Growth

At Meraas, we see Dubai’s economic growth as the foundation for creating thriving, future-ready communities. As the city expands and diversifies, we develop destinations that respond to evolving lifestyle needs, whether through waterfront living, integrated mixed-use spaces, or vibrant retail and leisure experiences.

Contact the Meraas team to learn more about our latest projects and the opportunities within Dubai’s dynamic property market.