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Dubai's ultra-luxury property market is expected to maintain its upward momentum in 2025, driven by strong demand, limited availability, and an influx of high-net-worth individuals (HNWIs). Over the past decade, sales of luxury villas and apartments priced above AED 15 million have surged, reaching AED 71 billion in 2024, marking a 688% increase since 2015. Despite ongoing construction, only a limited number of high-end properties will be available in the coming years, keeping supply tight. Developers are adapting to market trends by prioritising boutique, exclusive projects while international brands continue to attract global investors. As competition intensifies, strategic planning and premium offerings will be crucial for sustained growth.
Dubai's ultra-luxury real estate sector is projected to sustain its strong growth trajectory in 2025, propelled by robust demand, constrained supply, and a steady influx of high-net-worth individuals (HNWIs), according to a recent market analysis. Over the past decade, sales of luxury villas and apartments in Dubai, priced above AED 15 million, have surged significantly, reaching AED 71 billion in 2024 for the second consecutive year. This marks a remarkable 688% increase since 2015. Advertisement
Although more than 326,000 properties are currently under construction in Dubai, a report by fam Properties highlights the limited number of luxury and ultra-luxury units expected to enter the market over the next two to three years. The report indicates that the scarcity of ready properties, coupled with strong investor and buyer interest, will drive continued price growth in 2025. Data from DXBinteract reveals that only 16,500 units under construction belong to the luxury and ultra-luxury categories. Furthermore, most of these properties are far from completion, with 72% of them in the initial 0-20% phase of construction progress.
Firas Al Msaddi, CEO of fam Properties, stated that these figures highlight a restricted supply of ultra-luxury properties, pointing towards a highly exclusive and constrained market where demand is anticipated to remain strong for at least the next two to three years. He further explained that beyond this period, the supply-demand balance would depend on how new developments are received. If the projected annual inflow of 6,500 HNWIs continues from 2024 to 2026, steady demand will likely sustain price appreciation.
For 2025, fam Lux, the luxury division of fam Properties, aims to achieve AED 10 billion in sales transactions. Simultaneously, Nordic by fam, the group's boutique development firm specialising in bespoke villas, anticipates generating AED 1 billion in sales from ready ultra-luxury villas. As the ultra-luxury sector evolves, a shortage of villas and growing competition in the apartment segment are shaping both buyer preferences and developer strategies.
The availability of prime land for ultra-luxury villas in sought-after locations such as Palm Jumeirah, Jumeirah Bay Island, and Emirates Hills remains extremely scarce, contributing to a critically tight supply that sustains high demand. Similarly, the demand for ready ultra-luxury apartments far exceeds availability, causing prices to rise. Buyers are prioritising branded residences that offer genuine luxury and exclusivity. While the resale sector for apartments remains relatively balanced, buyers also have options in developments nearing completion. Demand for off-plan branded apartments remains high, with developers such as Sobha, Emaar, and DAMAC offering attractive investment opportunities.
Absorption rates for newly launched branded residences have adjusted due to increased supply, making it more challenging for developers to achieve the rapid sell-outs witnessed two years ago. For instance, fam Properties had secured AED 1 billion in bookings for the Bvlgari Lighthouse within 24 hours during that period. A new emerging trend in the ultra-luxury segment is the growing preference for boutique, limited-supply developments that maintain exclusivity and command premium prices. Meanwhile, in the off-plan market, developers partnering with international brands that are new to Dubai are attracting global investors and adding distinct value to their projects.
Al Msaddi noted that despite these market shifts, the core fundamentals remain strong. He emphasised that with meticulous planning, distinctive designs, and exclusive offerings, both developers and investors can continue to thrive in this booming sector.
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