How Government Initiatives Boost UAE Real Estate

The UAE’s real estate sector, a cornerstone of its economic diversification, continues to thrive, with Dubai alone recording AED 761 billion in transactions in 2024, according to Dubai Land Department (DLD) data.

Government initiatives have been instrumental in sustaining this momentum, fostering investor confidence and driving demand in a market where foreign buyers accounted for 58% of residential sales last year.

As the UAE projects 5-6% GDP growth for 2025, how have these policies shaped the real estate landscape, and what impact will they have moving forward?

The UAE’s government has implemented a series of reforms to position the country as a global real estate hub. Central to this strategy is the relaxation of foreign ownership rules, introduced in 2002 and expanded over the years, allowing non-residents to own freehold properties in designated areas like Dubai Marina, Palm Jumeirah, and Dubai South.

This policy has attracted significant capital, with foreign investment driving 60% of sales in emerging areas like Arjan in 2024. The Golden Visa programme, offering 10-year residency for property investments of AED 2 million or more, has further incentivised international buyers, with 25,000 visas issued in 2024, a 20% increase from 2023.

Regulatory enhancements have bolstered market transparency. The DLD’s instant Oqood registration system, implemented for off-plan properties, ensures immediate ownership documentation, reducing fraud risks. RERA’s mandatory escrow accounts protect buyer funds by tying developer access to construction milestones, contributing to 98% on-time project delivery in 2024.

These measures address historical concerns from the 2008-2010 market correction, fostering trust among investors, particularly in the off-plan segment, which accounted for AED 228.03 billion in transactions last year.

Dean Charter, Chief Operating Officer at Paragon Properties, a Dubai-based real estate consultancy, notes: “Government initiatives have transformed the UAE’s real estate market into a global benchmark for stability and opportunity. By blending investor-friendly policies with robust oversight, the UAE ensures long-term growth, but investors must stay attuned to evolving regulations to maximise returns.”

Infrastructure development is another critical driver. The Dubai 2040 Urban Master Plan, which prioritises sustainable urban growth, has spurred projects like the expansion of Al Maktoum International Airport, set to be the world’s largest by 2030, and the Etihad Rail network, connecting Dubai to Abu Dhabi.

These initiatives have boosted property values in areas like Dubai South, where prices rose by 10-12% in 2024, and supported rental yields of 7.5%. Expo City Dubai, leveraging the legacy of Expo 2020, has driven a 10% price increase in nearby communities since 2023, reinforcing the link between infrastructure and real estate growth.

Sustainability-focused policies are reshaping the market. The UAE’s Net Zero 2050 strategy and Dubai’s Green Building Regulations mandate energy-efficient standards, with 15% of new developments in 2024 achieving green certifications like LEED or Estidama.

DEWA’s Shams Dubai initiative, supporting solar integration, powered 2,000 buildings with 500 MW in 2024, reducing utility costs by up to 20%. Green-certified properties, such as Emaar’s The Valley, commanded a 5% price premium, appealing to eco-conscious investors and tenants, particularly in high-demand areas like Dubai Hills Estate.

Economic policies also play a role. The UAE’s tax-free environment, with no capital gains or income tax, enhances returns, with average rental yields of 7% and ROIs of 8-12% in 2024. The dirham’s peg to the US dollar provides currency stability, attracting 60% foreign buyers, though high interest rates tied to the peg increase borrowing costs for the 30% of buyers using financing. The UAE’s diversified economy, with tourism, logistics, and technology contributing 70% to GDP, mitigates risks from global commodity fluctuations, ensuring market resilience.

Challenges remain. The projected delivery of 76,000 new residential units in 2025, part of a 182,000-unit pipeline by 2026, could stabilise prices in mid-tier markets like International City.

While government oversight mitigates oversupply risks, investors must monitor supply pipelines and focus on undersupplied segments, such as villas in Emirates Hills, which saw 15% price growth in 2024. Geopolitical stability in the UAE counters regional risks, but global economic slowdowns could impact capital flows, necessitating vigilance.

For investors, government initiatives create a fertile environment. The Golden Visa and freehold policies make prime areas like Dubai Marina, with 7.5% yields, attractive for long-term gains.

Off-plan projects in infrastructure-driven areas like Dubai South offer affordability, with 8-10% ROIs upon completion.

Sustainable developments align with market trends, as tenant demand for green properties grows, particularly in short-term rental markets boosted by a projected 10% tourism rise in 2025. Engaging RERA-licensed agents and leveraging DLD data ensures compliance and informed decisions.

Looking ahead, the UAE’s government is likely to deepen its focus on sustainability and innovation. Policies promoting smart cities, such as Dubai’s integration of AI-driven urban planning, and incentives for green developments, will drive demand for eco-friendly properties. The continued rollout of infrastructure projects, like the Dubai Metro expansion, will enhance connectivity, supporting values in emerging hubs.

By aligning with these initiatives, investors can tap into a market projected to see 5-7% price growth in 2025, balancing opportunities in prime and emerging areas.

The UAE’s strategic reforms have cemented its real estate market as a global leader. For investors, leveraging government-driven opportunities—through freehold ownership, sustainable projects, and infrastructure-adjacent properties—requires data-driven strategies and due diligence. As the UAE advances its vision for a diversified, sustainable future, its real estate sector remains a compelling destination for global capital.