Prime Highlights:
- The UAE’s construction sector is projected to reach $130.8 billion by 2029, marking a 22% increase from 2024, driven by major state-led projects and economic diversification.
- Dubai and Abu Dhabi dominate the construction market, with 85% of contracts awarded between 2020 and 2025concentrated in these two emirates.
Key Facts:
- Within the construction sector, mixed-use projects account for 42%, residential projects 28%, data centers 9%, and hospitality projects 4%.
- Abu Dhabi’s construction accounts for 23% of awarded contracts, while oil and gas projects make up 40%, with about 33,000 residential units under construction.
Key Background:
The UAE’s construction industry is set to reach $130.8 billion by 2029, a 22 percent rise from 2024, according to a recent report by Knight Frank.
The report estimates $107.2 billion in construction output for 2024, with steady growth of about 4 percent each year. This shows a wider trend in the Gulf, as countries diversify their economies and depend less on oil.
Faisal Durrani, partner and head of research at Knight Frank Middle East and North Africa, highlighted the sector’s transformation, stating: “The UAE construction industry is in a period of robust growth and transformation, driven by economic diversification, tourism and strategic infrastructure investments, particularly in housing, transport and smart cities.”
Construction accounts for 62 percent of the UAE’s future project pipeline, with transport at 12 percent, power at 7 percent, and water at 5 percent. In construction, mixed-use projects make up 42 percent, residential projects 28 percent, data centers 9 percent, and hospitality projects 4 percent.
Abu Dhabi and Dubai lead the market, together making up 85 percent of all contract awards between 2020 and August 2025, valued at $151 billion in Abu Dhabi and $129.9 billion in Dubai. Residential construction costs range from 4,200 dirhams ($1,144) per sq. meter for standard villas to 11,000 dirhams for high-end villas, while commercial building costs range from 5,500 to 7,300 dirhams per sq. meter.
Dubai is leading construction activity, with 75 percent of its contracts in the sector, while oil and gas projects make up only 3 percent, showing the city’s move toward economic diversification. Future developments in Dubai are Palm Jebel Ali, The Oasis by Emaar, Marsa Al Arab, Therme Dubai, Naia Island, and an extension of Dubai Hills Estate, with a 15 km extension of the Blue Line metro network by 2029.
Construction projects occupy 23 percent of contracts in Abu Dhabi, with 40 percent of the projects being oil and gas projects. Major developments include a 150-km high-speed rail to Dubai by 2030 and a 131-km metro system. About 33,000 homes are under construction, mostly apartments.
With ongoing investments and growing urban populations, the UAE construction market is set for steady growth and long-term development.
