Thousands of Homeowners in Dubai Become ‘Accidental Millionaires’ as Property Prices Soar
Dubai’s real estate market continues to surge, with nearly one in five homes now valued at over $1 million, according to a new analysis by global real estate consultancy Knight Frank. The phenomenon has led to the rise of “accidental millionaires” — property owners whose investments have appreciated beyond the million-dollar mark purely due to price inflation.
$1 Million Homes Skyrocket
Knight Frank’s report revealed that out of the 530,000 homes sold in Dubai since 2002, a staggering 95,000 properties are now worth over $1 million. This shift represents a sharp increase, with homes in this category jumping from 6.3% of all sales in 2020 to 18.1% today.
The combined value of these $1 million homes is estimated at Dh822 billion, contributing significantly to the Dh1.47 trillion total market value of all homes sold in Dubai since 2002 — a 221% increase since 2020.
Property Prices to Grow by 8% in 2025
Dubai’s property market shows no signs of slowing down. Knight Frank forecasts an 8% increase in property prices by 2025, fueled by sustained demand from investors and new residents. This builds on a current 19.9% year-on-year increase in house prices, with luxury waterfront villas on the Palm Jumeirah and Jumeirah Islands experiencing values almost double those of 2014.
However, the consultancy predicts a gradual slowdown in growth rates starting in 2025, citing potential global economic risks.
Supply Shortages Amid Growing Population
To meet the growing demand, developers aim to deliver 300,000 new homes by 2029, with 80% being apartments and 17.4% villas. Despite this effort, the market faces challenges:
- Only 8,900 villas are expected to be delivered by the end of 2024, with 19,700 more due by the end of 2025.
- Knight Frank estimates that 37,600-87,700 new homes per year will be needed to accommodate Dubai’s projected population growth of 5.8-8.6 million by 2040.
Current supply trends, compounded by delays, suggest a persistent shortfall, with just 35,000 homes expected annually over the next six years.
Rising Competition for Prime Real Estate
The limited availability of development sites in prestigious areas is further driving prices, especially for off-plan properties. The secondary market is also seeing price growth as refurbished older homes gain value.
“Lack of development sites and homes for sale, either off-plan or ready, is widening the gap between Dubai’s prime neighborhoods and other areas,” said Petri Mannila, partner and head of prime residential UAE at Knight Frank.
Long-Term Outlook
As Dubai’s real estate market enters 2025 and beyond, the focus will remain on addressing the supply-demand imbalance while maintaining its allure as a prime global property destination. The continued rise of property values presents opportunities for investors while posing challenges for first-time buyers.
With demand showing no signs of abating, Dubai’s homeowners could see their investments continue to appreciate, solidifying the city’s reputation as a hotbed for real estate growth.
Source: Khaleej Times
