Dubai Real Estate: Accidental Millionaires Emerge

Dubai's real estate market broke new records in the second quarter of 2025, bringing significant wealth increases not only to investors but also to everyday homeowners. Recent data shows that around 37,000 homeowners in the city bought properties for less than $1 million years ago, which now significantly exceed this value. These individuals became accidental millionaires due to the rising property prices without any investment intentions.

Luxury Market Boom – $2.6 Billion Turnover

According to data from international consultancy Knight Frank, the sale of luxury apartments exceeding $10 million reached a new peak in the second quarter of 2025: a total of $2.6 billion worth of such properties changed hands, marking a 37% increase from the previous quarter and a 63% increase from a year earlier. The number of transactions reached 143, with 22 properties sold for more than $25 million.

Interestingly, since the second quarter of 2023, apartments have surpassed villas in the $10 million segment for the first time: 80 apartments and 63 villas were sold. Palm Jumeirah remained the most popular location for luxury sales (28 transactions), followed by La Mer (23) and Downtown Dubai (16).

Average Price and Demand – Stability at Luxury Level

According to the Knight Frank Prime Index, in the ten most sought-after luxury districts, the average price per square foot was 3,850 dirhams, which is 18% higher than in the second quarter of 2024, but virtually unchanged from the first quarter this year. This indicates that the market is driven by increased demand and turnover, rather than price increases.

Researchers say this aligns with the growing number of wealthy domestic and foreign buyers looking for homes in Dubai, either as a primary residence, second home, or long-term investment.

110,000 'Millionaire Properties' in the City

The study reveals there are currently more than 110,000 residential properties in Dubai valued at over $1 million. This accounts for 17.7% of all properties sold since 2002. The highest concentration is found on the Palm Jumeirah island (9,071 units), followed by Downtown Dubai (8,376) and Dubai Hills Estate (6,138).

These properties are collectively worth about 994 billion dirhams ($271 billion). Interestingly, about 21,000 of these properties are rented out, highlighting the significant buy-to-let segment of Dubai luxury real estate investments.

Housing Shortage and Population Growth Contradiction

Dubai's population grew by nearly 170,000 in 2024, while the city's housing stock increased by just over 30,000 new units. This gap opens new opportunities for developers and investors who can focus on home size and price categories where there is currently significant shortage.

Especially in the highest price categories, the supply has significantly dropped: in 2024, the number of properties for sale above $10 million decreased by 39%, and those above $25 million plummeted by 85% – from 583 to just 86.

What Does This Mean for Homeowners?

Most 'accidental millionaires' did not buy their homes for speculative purposes but for personal use. In the past three years, their number has increased by nearly 80%, confirming the rise of long-term ownership. The market has matured, with short-term sales dropping from 25% in 2008 to just 4-5% today.

This trend, coupled with the market's stable price growth and ongoing foreign interest, indicates that Dubai remains one of the most attractive real estate markets in the world in the premium segment.

(The article is based on Knight Frank's research findings.)