Dubai prices rose six times faster than the cost of building
Home prices are up 67% since 2019. Building one is up 11%. The gap is the whole argument about whether Dubai is expensive.
Two official indices, both published by the Dubai Statistics Center, both based at 100 in 2019.
By the end of 2025, the residential price index stood at 167.3. The construction cost index stood at 110.8.
Homes got 67% more expensive. Building one got 11% more expensive.
The gap has been steady for four years
| Year end | Prices | Build cost | Ratio |
|---|---|---|---|
| 2020 | 94.7 | 98.3 | both below base |
| 2022 | 123.1 | 103.7 | 6.3× |
| 2023 | 135.6 | 105.9 | 6.0× |
| 2024 | 153.7 | 107.9 | 6.8× |
| 2025 | 167.3 | 110.8 | 6.2× |
This is not one strange year. Since 2022, every additional percent on the cost of building has come with roughly six percent on the price of a finished home.
What it does and does not tell you
It is not a claim that developers are making six times more. Land is the missing term, and it is a large one. Construction cost measures materials and labour on site; it says nothing about what the plot cost, what the payment plan financing costs, or what marketing a tower costs.
It does say the price of a home is being set by demand, not by cost. In a market where prices tracked the cost of production, the two lines would move together. They have not moved together since 2021. What buyers will pay has been the binding constraint, not what it takes to build.
It changes what "expensive" means. A home priced far above its replacement cost is not automatically overpriced, because you cannot build one on that plot at that cost, and scarcity is real. But the further those lines separate, the more of the price is demand rather than physical cost, and demand is the part that can change quickly.
The 2026 complication
Construction costs jumped in 2026, rising 8.8% in six months against 10.2% across the previous seven years. Prices, meanwhile, have slowed to about 3% per square metre.
If both continue, the gap narrows from the wrong end: not because homes get cheaper, but because building gets dearer. That squeezes the developer margin on projects sold years ago at prices set against a much cheaper cost base, which is where delivery risk on off-plan comes from.
Method
Dubai Statistics Center residential property price index and construction cost index, both base year 2019, as published for 2025 Q4. Figures derived by a script kept with this site.