In 2025, a significant trend emerged in Dubai’s real estate market, highlighting a pronounced interest from Indian and UK nationals in property investments. As the Indian rupee faced a stark decline against the US dollar and the UAE dirham, property buyers increasingly sought opportunities in Dubai’s dollar-pegged assets, viewing them as a safeguard against currency fluctuations and a fruitful long-term investment strategy.

Impact of Currency Fluctuations

The value of the Indian rupee plummeted over 7% against the UAE dirham in the past year, reaching approximately Rs 25 per AED compared to Rs 23.3 a year prior. This depreciation, coupled with subpar rental yields in the Indian market, has prompted many Indians, including both professionals and small business owners, to consider property investments in Dubai. The objective is clear: to protect their wealth and capitalize on favorable market conditions abroad.

Many Indian investors are turning to relatives residing overseas or family offices for assistance in structuring their high-value property purchases. This shift comes amidst the tightening of regulations related to the Foreign Exchange Management Act (FEMA) and increased scrutiny concerning taxation for foreign remittances. Tax experts note that these adjustments necessitate a more cautious approach to international investments.

Increasing Demand for Dubai’s Real Estate

A Mumbai-based individual shared their decision to divest assets in India and purchase a property in downtown Dubai. “I made this move to safeguard against the dollar and secure a reliable rental income, especially since my daughter is studying in the US and the value of my assets in India is diminishing,” they explained. This highlights a growing sentiment among investors who are keen to leverage the rental yield differential in favor of Dubai.

As rental yields significantly contrast between Indian cities and Dubai, the incentive to invest in the latter becomes more appealing. According to Shikha Kapoor, a real estate agent from Gurgaon, “Rental yields in prime locations of Gurgaon hover around 2-3% for residential properties, whereas they range between 8-10% in Dubai.” Given the disparity, a property valued at INR 3 crores in Gurgaon may only yield an annual rental income of INR 6-9 lakhs, while the same investment in Dubai could potentially generate INR 24-30 lakhs.

Market Trends and Future Prospects

Significantly, Indians accounted for 10% of property transactions in Dubai in 2025, increasing from 6% in the previous year, according to Knight Frank. This upward trend reflects a larger movement within the industry. Furthermore, relatively low interest rates continue to attract more Indian investors to Dubai, as highlighted by a report from Betterhomes, a leading real estate agency in the UAE.

In 2025, Dubai experienced a record AED 547 billion in residential sales, supported by 203,000 transactions. Average residential sale prices surged by 12% during this timeframe, and leasing activity showed immense growth, maintaining average rents at approximately AED 207,000. This uptick reflects robust tenant demand and stability in pricing. Additionally, Indians constituted 14% of Betterhomes’ transactions in that same year, underscoring their increasing influence and presence in Dubai’s real estate landscape.

As the trend expands, it is evident that the combination of favorable currency valuation, attractive rental yields, and changing regulations will continue to drive Indian and UK nationals toward investment opportunities in Dubai, establishing it as a prime global real estate destination.