Dubai’s second-tier areas, where numerous new properties are being developed in 2025, are set to attract a significant influx of residents from nearby emirates.
The migration from neighboring emirates to Dubai will be influenced by factors such as heavy traffic that forces commuters to spend hours on the road and rising rental costs in Sharjah, Ajman, and Abu Dhabi.
“In 2025, expectations for property delivery in tier-2 areas like Jumeirah Village Circle (JVC), Arjan, Jumeirah Village Triangle (JVT), Sports City, and Motor City will be higher than usual. The availability of new supply in these areas will attract residents from other emirates who prefer more options at competitive rental prices in Dubai,” said Fawaz Sous, CEO of Octa Properties.
Sous also mentioned that the shift to Dubai is likely because rental prices in neighboring emirates are becoming comparable to rates in Dubai, thanks to the high delivery of new units. “Rentals in tier-2 areas are expected to ease slightly,” he noted in an interview.
Increased traffic due to population growth has led motorists to spend 3-4 hours daily commuting between Dubai and Sharjah-Ajman on weekdays. Rising rentals in neighboring emirates are providing little relief, prompting Dubai-based workers to relocate to the city to save time and avoid traffic.
Asteco’s Q3 2024 data reveals that a studio in Dubai’s International City costs Dh20,000 annually, compared to Dh18,000 in high-end areas of Sharjah near Dubai and Dh17,000 in Ajman. When factoring in fuel costs and time spent on commutes, the difference in rent is minimal.
With an increased supply of properties expected in 2025, rentals in these outer areas are anticipated to decline.
Asteco reported that over 40,700 units are set to be delivered this year, with nearly 120,000 units under construction for 2025, according to industry sources.
However, Sous highlighted that migration from older Dubai neighborhoods to newer communities is a constant trend and will persist into the coming year.
“There’s always a movement from older parts of Dubai to newer, more modern communities. This pattern is normal,” he said.
Fawaz Sous, born and raised in Dubai, has worked with leading UAE real estate developers Emaar and Damac before establishing his own company, Octa Properties, which achieved Dh4.4 billion in sales this year. The company is expanding its operations with two new entities and is preparing to announce its first independent project soon.
Sous expects traditional drivers, such as safety, security, high capital appreciation, rental returns, and lifestyle, to continue fueling Dubai’s property market in 2025.
He also emphasized Dubai’s robust infrastructure as a key factor. “Dubai has consistently developed its infrastructure, even during downturns like the 2008-09 financial crisis and the pandemic. This includes not only roads and bridges but also transparent legal frameworks that allow global investors to buy and sell properties remotely,” Sous explained.
High-end property prices are unlikely to decrease, as these areas will continue attracting demand. “New residents always prefer central, fully developed locations,” he said.
Sous takes a positive but cautious view of Dubai’s real estate market, acknowledging its cyclical nature. After peaking in 2014, property prices dipped during the pandemic but began recovering in 2021, continuing through 2024.
“Dubai’s property prices peaked in late 2014. Currently, prices are about 15% above that peak. While the market is 15-20% higher than 2014 levels, transaction volumes have quadrupled, indicating a healthy market. If transaction volumes were stagnant at 2014 levels with prices rising 20%, that would be a warning sign,” Sous concluded.
