Dubai Property Prices Poised to Double in Five Years, Says Driven CEO

With cap rates outpacing global cities and fundamentals driving demand, Dubai is on the brink of Tier-1 city status and a real estate boom.

Dubai Real Estate on the Rise: Driven CEO Predicts Price Surge Amid Global Benchmarking

Dubai’s property market could witness a dramatic transformation over the next five years, with prices projected to double, according to Abdullah Alajaji, CEO and founder of real estate brokerage firm Driven | Forbes Global Properties. His forecast arrives on the heels of a remarkable 2024 for the emirate’s real estate sector, which recorded 217,000 transactions worth AED 526 billion—a 38% rise in volume and a 27% surge in value compared to the previous year.

Despite the growth, Alajaji insists Dubai remains undervalued relative to global heavyweights like 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,” he told Gulf Business.

Cap Rates and Demand: Strong Fundamentals in Play

Cap rates, which measure the rental return on a property relative to its value, remain a key indicator of Dubai’s investment appeal. Alajaji explained, “If you’re renting a property that nets you $50,000 a year and the value is $1 million, it’s a 5% cap rate. These numbers are far higher than what you’d find in more mature cities.”

What sets this market cycle apart, he said, is its grounding in genuine demand. “Back in 2008, every area rose at the same pace, even if demand didn’t justify it. Today, we’re seeing price and rent increases rise together, which suggests real demand.”

Benchmarking Dubai: A Tier-1 City in the Making

Driven’s newly released report, Dubai on the Verge of Tier-1 City Recognition, positions the city among the world’s elite. It benchmarks Dubai against seven global cities—New York, London, Paris, Singapore, Sydney, and Hong Kong—across 28 indicators including infrastructure, quality of life, safety, and international appeal.

Dubai ranked fifth overall, with standout performances in infrastructure (2nd), international appeal (3rd), safety and security (4th), and quality of life (4th). “The value of transactions in Dubai reached around $200 billion last year — three times higher than London,” Alajaji emphasized. “That signals maturity. It shows there’s real depth and liquidity.”

Survey insights also point to positive sentiment: 43% of respondents believe Dubai’s property prices are fairly valued, 35% see them as somewhat overvalued, and only 11% view them as undervalued.

A Long-Term Vision

Alajaji remains bullish on the city’s trajectory, encouraging investors to focus on areas with limited land supply. “The way I would navigate it… is to look at areas that have limited supply of new land available for development,” he advised.

He concluded on an optimistic note: “We continue to invest in the growth of the city. We like it, we enjoy it, and we have fun doing it — so we’ll continue doing so.”

As Dubai climbs the ranks of global city status, its real estate market appears set for an exciting—and lucrative—future.