As Dubai’s tourism industry expands, it drives noticeable growth in the city’s real estate. According to Dubai Properties, Dubai’s real estate market peaked high in Q2 2023. It recorded over 30,000 property transactions, totalling AED 91 billion ($24,776,060,400)–a 35% increase in transactions and 54% surge in sales value from 2022.  

Real estate activities usually contribute 5.5% to UAE’s GDP. This expands the economy to reduce oil and gas revenue due to country’s economy being influenced positively/negatively by oil prices, according to Statista and Dubai Chamber.  

Ahmed Bukhash, Director of Urban Planning at Dubai Development Authority, was “optimistic” about Dubai’s real estate growth. During a Zoom call, he discussed “many positive numbers” hoping for “developments to continue.”  

Post-COVID vs Now

Dubai’s real estate sector once faced shutdown in 2020 during early COVID-19, according to Epra Journals. Post-lockdown, the city’s market faced implications influenced by lack of communication to continue the flow of real estate work.  

However, “Dubai’s real estate remained strong post-COVID against wars and inflation,” Sales and Leasing Manager Muhammed Abu-Bakr noted through a phone conversation.  

Residential values increased by 2.6% in Q3 2022. They marked the 7th consecutive quarter of growth, although average prices remained 22% below the 2014 peak, according to Knight Frank market review.  

Dubai’s real estate also faced a “luxury home drought” because “more homes get built than the market is capable of absorbing,” the review noted. It further elaborated that “despite strong demand, developers are not delivering new projects at a faster rate as we have seen in the past.”  

However, “despite the market slowing down, a steady growth was still present, now peaking high” Bukhash said.  

Effects of Tourism & Hospitality on Real Estate in Dubai 

In 2023, EMAAR’s brand value increased 30%. It was classified among top 10 global real estate companies as one of the two non-Chinese entities on the list, Statista reported.  

Bukhash highlighted tourism’s role in impacting similar property developers and UAE’s GDP, with more than 50%. “There are new strategies ensuring diverse and inclusive tourism options for sustainable development,” Bukhash informed.  

“Dubai appeals as a year-round preferred destination, particularly during non-peak times to avoid extreme heat,” Bukhash elaborated. 

Additionally, Dubai’s real estate sector saw significant growth in sales transactions, both by volume and value amid EXPO2020. In November 2021, the sector recorded AED28.5 billion ($7.8 billion) worth of sales from a total of 9368 transactions, according to Dubai Chamber.  

“Post-COVID-19, tourists optimistically travelled to visit Expo 2020, finding it as a window to the world” Bukhash noted, highlighting that “similar events like COP28 contribute significantly to Dubai’s global growth”. 

“Iconic areas facing growth include Downtown Dubai, Arjan, Marjan, and emerging areas around IMG especially Dubai Industrial City,” Bukhash furthered. “They accommodated affordable housing for luxury.”  

Dubai a “No 1 Destination for Everyone”

Also, Palm Jumeirah Lifestyle and Villa Manager Marco Utumo launched projects with Damac every month during 2023. “High demand led to rapid sell-outs, with returning clients securing units during pre-launch stages” Utumo shared through a phone conversation.  

“Tourist influx and local hospitality are even turning visitors into expats” Utumo said. Dubai has been recognised by Tripadvisor as the best travel destination for the third year in a row. This motivated Utumo and other Europeans like him to relocate.  

Additionally, Dubai showed high luxury real estate growth in 2023. Forecasts predicted 14% price increase for high-end properties, compared to 2020 where prices were to decrease by 2% from COVID-19.  

“Short-term rental platforms push the luxury real estate market which is predicted to boost high in Q2 2025”, Utumo said.