Real Estate Sector Emerges As Key Driver Of UAE Economic Growth In 2025

The UAE's real estate sector remains a key driver of economic growth, bolstered by investor confidence and a flexible legislative framework. New development projects continue to attract foreign investment across various property segments. Reports indicate that the sector is thriving in 2025, with increased foreign direct investment, stable rental markets, and government initiatives enhancing its appeal.

According to JLL, off-plan properties led sales in Dubai and Abu Dhabi during the year's first half. This surge was driven by new project launches and robust secondary market activity. Dubai's property sales reached AED153.7 billion in Q2, marking a 44.5% year-on-year increase, while Abu Dhabi saw a 12.1% rise in average sales prices.

The JLL report highlighted the ongoing growth of off-plan properties, supported by new project launches. Approximately 32,400 residential units are under construction in Abu Dhabi and Dubai during the second half of 2025. This reflects strong demand from investors and buyers, confirming the market's capacity to meet rising housing needs.

Rental markets in both cities remained stable as tenants preferred renewing existing contracts. This stability contributed to a 9.4% year-on-year increase in lease contracts in Abu Dhabi during Q2, while Dubai experienced an 11.5% rise in total residential leases.

Abu Dhabi recorded a 9.1% increase in total sales transactions, with secondary market growth at 32.6%. Meanwhile, Dubai maintained annual growth of 22.8% in total sales, supported by ongoing off-plan launches and a 17.1% rise in secondary sales.

The office market also expanded significantly. In Abu Dhabi, office stock grew by 78,000 square metres in Q2 to reach 4.6 million square metres, with an additional 66,000 square metres expected by year-end. Dubai added 24,000 square metres of office space, bringing the total to 9.3 million square metres.

Future Projections for Real Estate Market

A Statista report forecasts that the UAE real estate market will reach US$693.53 billion by the end of 2025, with the residential segment leading at US$401.81 billion. The sector is anticipated to grow annually by 2.28%, reaching US$759.04 billion by 2029.

Mordor Intelligence estimates the UAE real estate services market at US$18.45 billion for 2025, expanding to US$24.75 billion by 2030 at a compound annual growth rate of 6.05%. This growth reflects increased foreign investment and demand for logistics assets and premium housing projects.

The report also highlights Ras Al Khaimah as having the highest projected growth rate among emirates due to diverse investment opportunities and expanding real estate activities across all regions.

With inputs from WAM