Dubai has been ranked as one of the top three prime residential markets globally in terms of capital value growth in the first half of this year as prices continue to surge in the emirate on strong investor demand.
The emirate recorded a 5 per cent annual growth in prices in the six months to the end of June in the prime residential segment, driven by “rising immigration flows, steady investor confidence and limited supply in the luxury segment”, according to Savills’ latest World Cities Prime Residential Index.
Tokyo, with an 8.8 per cent price appreciation in prime residential values topped the index, followed by German capital Berlin.
Dubai’s “global connectivity, investor-friendly policies and continuing infrastructure development continue to underpin its status as one of the world’s leading real estate markets”, said Andrew Cummings, head of residential agency, Savills Middle East.
“Lower costs associated with buying and selling property compared to global peers, and further headroom for price growth mean that Dubai’s appeal on an international scale is still very strong.”
Dubai's property market has been booming in recent years, having benefited from government initiatives such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE’s economy on diversification efforts.
In July, a scheme was also launched to help Emiratis and UAE residents who do not own freehold residential property in the emirate get on the ladder.
In the first half of 2025, the volume and value of all real estate transactions in Dubai rose sharply amid the entry of more than 59,000 more investors into the booming market, the Dubai Media Office said in July, quoting Dubai Land Department (DLD) data.
The number of transactions reached 125,538, up nearly 26 per cent on an annual basis, while value of these transactions rose about 25 per cent to about Dh431 billion, according to the DLD data.
Dubai has outpaced other markets in sales and rental growth of prime property in the first half, the Savills report said. Across the 30 global cities tracked by Savills in the index, prime capital values grew by 0.7 per cent during the six-month period.
The report also highlighted mortgage trends across leading global markets, with buyers in the UAE typically accessing loan terms of 15 to 30 years. Minimum deposits are set at 15 per cent for nationals and 20 per cent for expatriates.
“These conditions reflect a relatively mature financing environment that supports both domestic purchasers and international investors, further contributing to the resilience of the prime residential sector,” Savills said.
Luxury prices set to rise further
Looking towards the second half of the year, Savills anticipates average capital value growth of 1.5 per cent globally.
Dubai is expected to remain one of the top performers, especially for capital value growth, it said.
Prime values in Dubai are expected to rise a further 4 per cent to 5.9 per cent in the second half of the year on the back of high demand from investors.
While 60 per cent of cities in the index recorded positive capital value growth in the first half of the year, declines in the remaining markets were “generally modest and concentrated in larger, more mature cities”, Savills said.
“As we move into the second half of the year, supply-side constraints, macroeconomic uncertainty and policy responses will continue to shape the trajectory of prime residential markets globally, but prices are expected to remain in positive growth territory,” it added.
