Dubai developers score red-hot profits from global homebuyers

The party is still raging on for Dubai’s property developers.

Builders in the city, which is part of the United Arab Emirates, are reporting surging profits and record sales. Dubai was the world’s third best performing location for prime real estate in 2024 with a 16.9% increase, according to the Knight Frank cities index. That demand has been driven by expats who’ve landed in the city and overseas buyers who’ve swooped in to capitalize on the boom.

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Emaar Development PJSC — the construction arm of the conglomerate that built the world’s tallest tower in Dubai — reported record profit of 7.6 billion dirhams ($2 billion) in 2024. That was double its earnings for 2022. Binghatti Holding Ltd. also more than doubled earnings from a year earlier.

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In neighboring Abu Dhabi, Aldar Properties PJSC’s annual profit exceeded analyst estimates. The company’s revenue soared 62% from the previous year to 23 billion dirhams.

Home prices are now expected to continue to rise in the coming year. “Population growth has powered this property rally and that will likely carry on into 2025 even if perhaps at a slower pace,” said Mohammed Ali Yasin, founder and chief executive officer of Oracle Financial Consultancy and Investments.

Dubai’s property market has seen sharp downturns in earlier years. Still, the present rally has been a lengthy one, fueled by the government’s handling of the pandemic and its liberal visa policies. Meanwhile, the luxury end of the emirate’s real-estate market — including waterfront villas on the city’s man-made palm-shaped islands — has benefitted from an influx of wealthy investors. Among them have been Russians seeking to shield their assets, crypto millionaires and bankers leaving jobs in Asia.

The gains aren’t always even, but smaller firms which were forced to restructure in previous downturns have started to see profits. Among those was Deyaar Development PJSC, which saw profit rise 7.5% to 473.9 million dirhams for 2024.

Despite the dimmer spots, investors have broadly embraced property stocks.

A dozen analysts covering parent, Emaar Properties, recommend investors “buy” the stock. Its shares have risen more than 70% in the past year.

Aldar’s shares have also climbed more than 70% over the same period, while Deyaar’s stock has risen about 27%.

Property firms are now using their big profits to keep building to attract even more buyers.

“Developers are starting new projects amid expectations that homes are needed for new residents coming from all over the world,” Yasin said.