UAE Real Estate Sector Powers Ahead as Key Driver of Economic Growth in 2025

The UAE’s real estate sector has firmly consolidated its position as one of the main engines of national economic growth in 2025. Supported by robust investor confidence, a flexible legislative environment, and the continuous launch of new projects, the sector continues to attract foreign capital and sustain its momentum across residential, commercial, and luxury property segments.

Emaar Beachfront, Dubai

Investor Confidence Fuels Growth

According to international reports, the UAE real estate market is thriving on the back of rising foreign direct investment, stable rental markets, and government initiatives that encourage innovation and reinforce the country’s global appeal. This confidence is evident in the sustained growth of off-plan projects, strong demand in the secondary market, and new large-scale developments across Dubai, Abu Dhabi, and beyond.

Off-Plan Projects Dominate Sales

A recent report by JLL revealed that off-plan properties dominated transactions in Dubai and Abu Dhabi during the first half of 2025. Driven by an influx of new launches and heightened secondary market activity, this trend pushed Dubai’s property sales to a record AED 153.7 billion in Q2 2025, marking a 44.5% year-on-year increase.

Meanwhile, Abu Dhabi also demonstrated strong performance, with average sales prices rising 12.1% during the same period. In total, around 32,400 new residential units are under construction across both cities for delivery in the second half of the year, reflecting the sector’s ability to meet rising housing needs while maintaining strong demand.

Stable Rental Market Adds to Appeal

The UAE’s rental sector has also shown resilience and stability. Tenants in both Dubai and Abu Dhabi displayed a preference for renewing existing contracts, contributing to a 9.4% year-on-year rise in lease contracts in Abu Dhabi and an 11.5% increase in Dubai during Q2 2025. This reflects not only tenant confidence but also sustained demand across the rental market.

Secondary Market Gains Momentum

In terms of sales, Abu Dhabi registered a 9.1% increase in total transactions, supported by an impressive 32.6% rise in secondary sales. Dubai also maintained its lead, recording 22.8% annual growth in total sales, driven by ongoing off-plan launches and a 17.1% surge in secondary sales.

Expanding Office Market

The UAE’s commercial real estate sector is also expanding to meet the demands of a growing business ecosystem. Abu Dhabi’s office stock grew by 78,000 square metres in Q2, reaching 4.6 million square metres, with an additional 66,000 square metres expected by year-end.

Dubai, on the other hand, added 24,000 square metres in the same period, bringing its total office space to 9.3 million square metres. Looking ahead, 2026 is set to bring a major expansion, with 264,000 square metres of premium offices scheduled for delivery within Dubai International Financial Centre (DIFC).

Market Outlook: Strong Growth Ahead

Reports by Statista and Mordor Intelligence further confirm the UAE’s positive real estate trajectory:

• Statista projects the market will reach US$693.53 billion by end-2025, with the residential segment leading at US$401.81 billion. By 2029, the market is expected to grow to US$759.04 billion at a CAGR of 2.28%.

• Mordor Intelligence estimates the UAE’s real estate services market at US$18.45 billion in 2025, expanding to US$24.75 billion by 2030 with a CAGR of 6.05%.

This growth is fueled by foreign investment, rising demand for logistics facilities, expansion of data centres, and the continued appetite for premium housing.

Spotlight on Ras Al Khaimah

Interestingly, Ras Al Khaimah is expected to record the highest growth rate among the emirates in the coming years. The emirate’s appeal lies in its diverse investment opportunities and its expanding portfolio of real estate projects, further reinforcing the UAE’s nationwide growth story.

Final Thoughts

With off-plan projects driving transactions, rental markets showing stability, and the office sector poised for expansion, the UAE’s real estate industry continues to prove itself as a cornerstone of economic growth in 2025. Combined with government support, foreign investor confidence, and the increasing interest of high-net-worth individuals in luxury properties, the sector is not only maintaining momentum but also shaping the UAE’s position as a leading global investment hub.