Dubai property prices set to double in next 5 years, says Driven CEO

Dubai’s real estate prices could double within the next five years, says Abdullah Alajaji, CEO and founder of brokerage firm Driven | Forbes Global Properties.

The forecast comes amid the emirate’s recent strong growth in real estate prices. Dubai’s real estate market recorded 217,000 investments valued at Dhs526bn in 2024, reflecting growth rates of 38 per cent and 27 per cent in terms of number of transactions and value respectively, according to data from the government of Dubai.

But Alajaji, who launched a new report benchmarking Dubai against the world’s most established global cities earlier this week, said there’s still more room to grow as property prices in Dubai are still lower than counterparts such as New York and Singapore.

“Our thesis here is, if we’re still at one-fifth of the prices of global cities, and the cap rates are still more than double global cities, we do expect that… prices will go up,” Alajaji told Gulf Business.

Cap rates, the rental return on a property relative to its total value, are central to Alajaji’s argument.

“The cap rate is basically the yield that a property generates relative to its full value,” Alajaji explained. “For example, if you’re renting a property that nets you $50,000 a year and the value is $1m, it’s a 5 per cent cap rate.”

He added that unlike previous real estate cycles, current prices are supported by fundamentals. “I would compare this time to pre-2008. Back then, every single area went up at the same level — you’d see 30 to 40 per cent increases in a single year, whether you were in JVC or Palm Jumeirah. But rental yields were much lower. Today, rents have gone up in tandem with prices, which suggests real demand.”

Dubai’s position as a Tier-1 city

The report released by Driven earlier this week, entitled Dubai on the Verge of Tier-1 City Recognition, introduces the company’s Tier-1 City Index. It benchmarks Dubai against New York, London, Paris, Singapore, Sydney and Hong Kong across 28 indicators including infrastructure, quality of life, safety, economic depth and international appeal.

Dubai ranked fifth out of seven global cities in the index, with standout scores in infrastructure (2nd), international appeal (3rd), safety and security (4th), and quality of life (4th).

Alajaji also highlighted the strength of Dubai’s transaction activity.

“The value of transactions in Dubai reached around $200bn last year — three times higher than London,” he said. “That signals maturity. It shows there’s real depth and liquidity.”

The report found that 43 per cent of survey respondents believe Dubai’s property prices are fairly valued, while 35 per cent saw them as somewhat overvalued. Just 11 per cent believed they are undervalued.

As for market sentiment, Alajaji said: “Overall, we see a stabilisation of the market. The way I would navigate it… is to look at areas that have limited supply of new land available for development.”

He remains bullish on the city’s long-term potential. “We continue to invest in the growth of the city,” he said. “We like it, we enjoy it, and we have fun doing it — so we’ll continue doing so.”