Dubai's ultra-luxury real estate sector is set to continue its robust growth trajectory in 2025 due to strong demand, limited supply, and a steady influx of high-net-worth individuals (HNWIs), as per the market study.
Over the last ten years, sales of luxury Dubai villas and apartments valued above AED15 million have risen dramatically, reaching AED 71 billion in 2024 for the second year in a row, an increase of almost 688 per cent since 2015.
However, while just over 326,000 are properties currently under construction in Dubai, a fäm Properties report reveals a limited number of luxury or ultra-luxury properties that will enter the market over the next two to three years.
The report highlights a scarcity of ready properties, particularly amid keen buyer and investor interest, supporting continued price growth in 2025. The DXBinteract data showed that only 16,500 units being built are in the luxury or ultra-luxury sectors as follows: AED 5-10 million: 10,209 units[ AED 10-15 million: 2,360 units; AED 15-30 million: 2,831 units ; AED 30-60 million: 809 units; AED 60+ million: 330 units
In addition, most of these are a long way from completion, with 72 per cent in the 0-20 per cent range in terms of construction progress.
Firas Al Msaddi, CEO of fäm Properties, said, "These figures underscore a restricted supply of ultra-luxury properties, indicating a highly exclusive and limited market, with demand expected to stay strong for at least the next two to three years."
"Beyond that, the balance of supply and demand will depend on how new projects are received. But if the forecasted inflow of around 6,500 HNWIs per year holds true through 2024-2026, we're likely to experience steady demand, supporting price appreciation."
As the ultra-luxury market matures, a shortage of villas and growing competition in the apartment market are shaping buyer preferences and developer strategies.
Prime land for ultra-luxury villas in areas like Palm Jumeirah, Jumeirah Bay Island, and Emirates Hills is minimal, resulting in a critically short supply, keeping demand consistently high. Demand for ready ultra-luxury apartments remains significantly higher than supply, driving prices up. Buyers are focused on truly branded residences with a genuine luxury element.
Supply and demand for apartments in the resale sector are relatively balanced. Buyers also have options in developments nearing completion. Absorption rates for newly launched branded residences have shifted due to greater supply. Developers are finding it harder to replicate the instant sell-outs two years ago.
Another new trend is that buyers in the ultra-luxury segment are prioritising boutiques with limited-supply developments that retain higher levels of exclusivity and command premium prices. Meanwhile, developers partnering with international brands new to Dubai are attracting global investors and adding unique value to new projects in the off-plan market.
