Why Dubai Continues to Outperform the World’s Prime Markets?
As we step into the second half of the decade, Dubai’s real estate market is not just outperforming itself; it’s outpacing the world’s most prestigious global cities. While many international property markets are seeing tepid or even negative growth, Dubai is defying global trends with powerful capital gains and skyrocketing rental yields, especially in its prime residential segment.
According to the latest Savills Prime Residential World Cities Index, Dubai registered a 6.8% increase in capital values in 2024 and is forecasted to grow by another 8% to 9.9% in 2025, the highest among the 30 global cities tracked. In rental terms, the emirate’s 23.5% rental price growth in 2024 was unmatched, and even more gains are expected this year.
Let’s explore what sets Dubai apart and how it compares to other major global real estate hubs.
Dubai’s Standout Performance in 2024
In a year that saw most global markets grappling with geopolitical uncertainties, elections, and macroeconomic volatility, Dubai emerged as a clear outlier in luxury real estate. Several key factors contributed to this:
- High demand for luxury living: Wealth migration and the arrival of high-net-worth individuals (HNWIs) and family offices played a significant role.
- Limited supply in prime locations: Despite a surge in development, supply has not kept pace with demand in top communities like Palm Jumeirah, Jumeirah Bay, and Emirates Hills.
- Stable policies and strategic positioning: The UAE’s business-friendly environment, tax benefits, and visa reforms have turned Dubai into a magnet for global investors and digital nomads alike.
A Global Snapshot: Cities Compared
While Dubai saw 6.8% capital value growth in 2024, many historically dominant global cities either stagnated or posted negative numbers. London, New York, San Francisco, and Hong Kong underperformed due to political and economic headwinds.
Here’s a comparison of 2024’s performance and 2025 forecasts for key cities:
Prime Residential Market Capital Value Comparison (Savills, 2024–2025)
| City | 2025 Forecast | 2024 Growth (%) | Price (Dec 2024) – USD/psf | Price (Dec 2024) – EUR/psm |
| Dubai | +8% to 9.9% | 6.8% | $930 | €9,200 |
| London | -3.9% to -2% | 0.0% | $1,920 | €18,900 |
| New York | >0% to 1.9% | -0.9% | $2,590 | €25,500 |
| Hong Kong | -3.9% to -2% | -2.4% | $3,860 | €38,000 |
| Singapore | -1.9% to <0% | 1.1% | $1,810 | €17,900 |
| Sydney | +4% to 5.9% | 3.9% | $1,950 | €19,200 |
| Madrid | +4% to 5.9% | 9.4% | $1,120 | €11,000 |
| Tokyo | +2% to 3.9% | 8.6% | $2,120 | €20,900 |
| San Francisco | -1.9% to <0% | 0.8% | $1,410 | €13,900 |
| Paris | >0% to 1.9% | 2.1% | $1,880 | €18,600 |
Observation: Dubai not only has the highest forecasted capital appreciation in 2025, but it also offers prime luxury real estate at far more accessible rates than cities like New York or Hong Kong; making it a high-yield, high-growth proposition.
The Rental Boom: A Hidden Advantage
While many cities struggled to maintain rental value, Dubai saw an eye-popping 23.5% increase in rents in 2024, largely due to:
- Surge in job creation across finance, tech, and tourism.
- Influx of global talent and affluent expatriates.
- Delayed buying decisions by international buyers opting to rent before investing.
Savills expects rental prices in Dubai to grow by over 10% in 2025, further boosting yield-driven investments. In contrast, most cities on the index are forecasting either stagnant or subdued rental growth.
Why Dubai Wins: Structural Advantages
Dubai’s consistent outperformance is not just a matter of cyclical luck; it’s structural. Key differentiators include:
1. Price Accessibility
With prime property at $930 PSF, Dubai is far more affordable than global giants like Hong Kong ($3,860 PSF), New York ($2,590 PSF), or Geneva ($2,550 PSF), offering better value for investors.
2. Investor-Friendly Regulations
- 100% foreign ownership in designated zones.
- No property tax or capital gains tax.
- Golden Visa opportunities for real estate investors.
3. Strategic Developments
From ultra-luxury branded residences like Bugatti Residences and Six Senses to waterfront megaprojects such as Rashid Yachts & Marina, Dubai continues to redefine what prime living means.
4. Infrastructure and Connectivity
World-class airports, metro systems, and continued investment in smart cities and green tech give Dubai a futuristic edge that many older cities are struggling to retrofit.
Global Outlook: A Mixed Bag
Savills anticipates an average global prime price growth of 1.6% in 2025, down from 2.2% in 2024. Political transitions, inflation concerns, and regulatory pressures are affecting investor confidence.
- London: Brexit aftermath and higher interest rates have dampened demand.
- New York: Market remains cautious amid interest rate volatility and tax pressures.
- Hong Kong: Declining demand due to emigration and geopolitical concerns.
- Singapore: Government cooling measures, including increased ABSD (Additional Buyer’s Stamp Duty), have slowed the market.
Dubai, by contrast, remains largely insulated from these global disruptions, positioning it as a stable and lucrative haven for international investors.
The 2025 Investor Outlook
The combination of double-digit rental returns, robust capital appreciation, and long-term policy stability makes Dubai not just a luxury lifestyle choice but a strategic portfolio anchor. The strong rental performance and capital appreciation are making Dubai an increasingly attractive destination for global investors… high-value transactions and new ultra-luxury developments are reshaping the city’s real estate landscape.
Final Thoughts
In a rapidly evolving global real estate landscape, Dubai stands tall. As traditional heavyweights face headwinds, the emirate’s blend of affordability, stability, luxury, and futuristic infrastructure is rewriting the playbook for prime property investing.
With the highest growth forecast globally in 2025, Dubai is no longer playing catch-up, it’s setting the pace.
Whether you’re an investor seeking high returns, a family office looking for wealth preservation, or a lifestyle buyer wanting world-class amenities and global connectivity, Dubai is not just an option, it’s the benchmark.
