Population growth and lower interest rates are boosting housing demand across Dubai.
Dubai: Dubai’s population has surpassed four million, a milestone that is directly driving housing demand and fueling record activity in the property market, which saw transactions approach Dh900 billion last year.
The emirate added nearly 18,000 residents in a single month by the end of August 2025, reflecting sustained inflows fueled by employment growth, business relocations, and continued international migration. According to Savills, this steady demographic growth is translating into strong, broad-based demand across both rental and ownership markets.
New residents are entering the market at multiple price points — from mid-income professionals seeking apartments near employment hubs to high-net-worth individuals targeting prime waterfront properties and villa communities.
Data from the Dubai Land Department shows that property sales in 2025 exceeded Dh680 billion across more than 200,000 transactions, marking the strongest annual performance on record. Including mortgages and gifts, total real estate transaction value climbed to around Dh919 billion, underscoring the market’s depth and liquidity.
Savills notes that population growth has become one of the most influential factors driving housing demand in the emirate.
“When Dubai adds close to 18,000 residents in a single month, it has an immediate impact on market activity,” said Alec James Smith, Head of Residential Sales and Leasing at Savills Middle East. “We see it in enquiry levels, viewing volumes, and the speed at which well-priced homes transact. This demand is driven by people relocating for work and lifestyle, alongside investors targeting resilient rental income.”
He added that long-term relocation trends continue to support demand.
“As population growth continues, well-located and high-quality stock remains consistently sought after.”
Record activity signals sustained confidence
Market momentum strengthened markedly in the second half of 2025, with the fourth quarter recording the highest quarterly sales value ever, exceeding Dh187 billion. Three consecutive record months during this period reflected steady engagement from both investors and end users, rather than short-term speculative activity.
Research also found that Dubai’s prime residential segment experienced strong growth, with nearly 6,000 transactions above Dh10 million completed during the year. Limited supply in established prime locations, combined with ongoing wealth-driven migration, has helped maintain both price stability and rental resilience.
Savills noted that Dubai continued to outperform many global residential markets through 2025, supported by population growth, job creation, and sustained international demand.
Lower borrowing costs support buyer confidence
Financing conditions are improving following recent interest rate cuts by the UAE Central Bank, which are expected to gradually reduce mortgage costs and bolster buyer confidence.
According to Savills, improving affordability typically leads to stronger buyer engagement in the following quarters, especially among end users who had previously delayed purchasing decisions.
Lower interest rates also increase the relative attractiveness of property investment in Dubai, where rental yields remain competitive compared with global markets.
Supply discipline will shape the next phase
Rapid population growth is placing greater importance on aligning supply with demand across locations, price ranges, and infrastructure readiness.
Andrew Cummings, Head of Residential Agency at Savills Middle East, noted that the population milestone underscores the emirate’s ongoing global appeal.
“Dubai crossing the four million population mark is a clear signal of the city’s global appeal and economic momentum. This growth supports a broad spectrum of housing demand, from first-time buyers to ultra-high-net-worth individuals,” said Andrew Cummings.
He added that the next stage of the market will depend on disciplined development.
“The upcoming phase will be shaped by controlled supply, infrastructure-led projects, and a continued focus on quality. These fundamentals position Dubai strongly as it plans for a population of nearly six million residents by 2040.”
Population growth, easing financing conditions, and strong transaction activity continue to reinforce confidence in Dubai’s residential market as it enters 2026.
