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Home / Features / Real estate key driver of UAE economic growth

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Real estate key driver of UAE economic growth

The real estate sector in the UAE has consolidated its position as one of the main engines of economic growth, supported by growing confidence from local and international investors in the country’s economic fundamentals and flexible legislative environment, while continuing to launch new development projects that attract foreign investment across various property segments.

According to the latest international reports, the UAE’s real estate sector is maintaining its upward momentum in 2025, driven by rising foreign direct investment, expansion of off-plan projects, rental market stability, and government initiatives that promote innovation and enhance the investment appeal of the local market.

A recent report by JLL revealed that off-plan properties dominated sales transactions in both Dubai and Abu Dhabi during the first half of the year, supported by the launch of new projects and strong activity in the secondary market. This led to record levels of activity, with Dubai’s property sales reaching AED153.7 billion in the second quarter, up 44.5 percent year-on-year, while average sales prices in Abu Dhabi rose 12.1 percent during the same period.

The report confirmed the continued growth of off-plan properties backed by new project launches, with around 32,400 residential units under construction in Abu Dhabi and Dubai during the second half of 2025, reflecting sustained strong demand from investors and buyers and confirming the market’s ability to meet rising housing needs.

It noted that the rental market in Abu Dhabi and Dubai remained stable, with tenants preferring to renew existing contracts. This contributed to a 9.4 percent year-on-year rise in lease contracts in Abu Dhabi in the second quarter, while Dubai recorded an 11.5 percent increase in total residential leases.

In terms of sales, Abu Dhabi registered a 9.1 percent increase in total sales transactions, with strong growth in the secondary market of 32.6 percent. Meanwhile, Dubai continued to post annual growth of 22.8 percent in total sales, supported by ongoing off-plan launches and a 17.1 percent rise in secondary sales.

On the office market side, Abu Dhabi’s stock increased by 78,000 square metres in the second quarter to reach 4.6 million square metres, with a further 66,000 square metres expected by the end of the year. In Dubai, 24,000 square metres of office space were added, bringing the total to 9.3 million square metres, with 2026 expected to see a wave of premium offices delivered within Dubai International Financial Centre amounting to 264,000 square metres.

In parallel, a report by Statista projected that the UAE real estate market will reach US$693.53 billion by the end of 2025, with the residential segment leading at US$401.81 billion. The sector is expected to record an annual growth rate of 2.28 percent until 2029, reaching US$759.04 billion. The market continues to attract growing interest from high-net-worth individuals seeking luxury properties, further strengthening the country’s status as a leading global investment destination.

In the same context, a report by Mordor Intelligence estimated the UAE real estate services market at US$18.45 billion in 2025, with expansion to US$24.75 billion expected by 2030 at a compound annual growth rate of 6.05 percent. This growth reflects the sector’s resilience, driven by increased foreign investment, rising demand for logistics assets, and expanding data centre and premium housing projects.

The report also projected Ras Al Khaimah to record the highest growth rate in the coming years, highlighting the diversity of investment opportunities and the expansion of real estate activity across all emirates.

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