How UAE’s Economy Affects Dubai’s Property Market

Dubai’s property market evolves rapidly As the UAE welcomes a growing population and an expanding base of global businesses, the city’s infrastructure is evolving to support this momentum. Dubai Statistics Centre projects that the population will reach 4 million by the end of 2025, reinforcing long-term confidence in the market. According to the Savills Dubai Residential Market Report for Q1 2025, sustained migration trends are expected to underpin demand, supported by factors such as a low-tax environment and attractive long-term residency pathways, among other factors. Against this backdrop of continued expansion, several core pillars are shaping Dubai’s real estate trajectory.

Economic Growth and Diversification

Dubai’s property market is closely aligned to the UAE’s broader economic performance. As the national economy strengthens, particularly across its non-oil sectors, demand for real estate in the emirate strengthens.

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, projected to expand by 4.9%.

This economic diversification continues to shape Dubai’s real estate landscape. Growth across sectors supports new job opportunities, infrastructure development, and an increase in demand for housing across both ownership and rental markets.

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, favourable tax environment, and ease of property ownership.

According to the Public Debt Management Office, over 129,000 new investors entered the property market in Dubai in 2025, marking a 23% increase compared to the previous year. This highlights 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 remains the central pillar of Dubai’s economy, with strong links to the real estate sector. In 2025, Dubai welcomed approximately 17.55 million international overnight visitors from January to November, reflecting continued growth as the city strengthens its global appeal. This sustained inbound traffic is translating into strong activity in the short-term rental and holiday home market. Dubai’s short-term rental sector – including apartments and villas licensed as holiday homes – has expanded rapidly, with reports showing more than 22,000 licensed short-term rental properties in 2025, up around 35% year-on-year. Investors, particularly foreign buyers, are increasingly purchasing properties to operate as holiday homes, taking advantage of favourable regulations, no personal income tax on rental earnings, and strong occupancy during peak seasons. Many owners professionally manage these properties to maximise yields, with typical rental revenues and occupancy rates supported by Dubai’s rising visitor numbers. This dynamic makes short-term rentals an attractive strategy for investors seeking higher returns and flexible use, while also contributing to Dubai’s broader tourism ecosystem. 

Population Growth

With Dubai’s population surpassing 4 million in 2025, the UAE’s broader economic expansion continues to attract professionals, investors, and entrepreneurs to the city. This demographic momentum strengthens demand across Dubai’s real estate market, supporting the need for a broad spectrum of property types, from contemporary studios to high-end villas.

Contributing to Long-Term Growth

At Meraas, Dubai’s economic progress forms the foundation for shaping thriving, future-ready communities. As the city continues to expand and diversify, we create destinations that reflect evolving lifestyle expectations, whether through waterfront living, integrated mixed-use environments, or dynamic retail and leisure settings.

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