Dubai enters the top three of global housing markets

Dubai has cemented its reputation as one of the world's leading luxury housing markets, reporting robust capital value growth in the first half of 2025, according to a new report from Savills.

According to the latest World Cities Prime Residential Index, the prices of prime properties in the emirate have increased by over 5% over the period. The main drivers are the continuous influx of new residents, increased interest from investors and limited supply. This places Dubai right behind Tokyo and Berlin in the global ranking.

For the second half of the year, experts predict a further increase of between 4% and 5.9%, underlining the market’s continued attractiveness to international buyers. Rents in the premium segment also continue to rise – by 2.9% in the last six months and 13.3% year-on-year. Despite some slowdown, the high rate of renewals and stable demand from affluent clients confirm the strength of the market.

“Despite global economic challenges, Dubai’s luxury residential segment has demonstrated impressive resilience,” said Andrew Cummings, Head of Residential at Savills Middle East. He said the city’s international connectivity, pro-investment policies and extensive infrastructure development have cemented its status as a global real estate hub.

Among the 30 cities monitored, Dubai outperformed most competitors in both capital growth and rental levels, trailing only Tokyo, Berlin and Seoul. By comparison, globally, capital values in the premium segment have grown by an average of 0.7% and rents by 2%.

The report also highlights mortgage financing in the UAE – with terms ranging from 15 to 30 years, fixed and floating rate options, and a minimum down payment of 15% for locals and 20% for foreigners. However, in the luxury segment, mortgages are often used as a financial planning tool rather than a necessity.

Savills forecasts average price growth of 1.5% and rents of 1% globally by the end of 2025. Dubai is expected to remain among the most promising markets, especially in terms of capital appreciation.

Source:   Khaleej Times

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