UAE Construction Output Forecast To Surpass $130 Billion Mark by 2029

UAE’s construction sector is projected to reach US$ 130.8 billion by 2029, up from US$ 107.2 billion in 2024, as government-led projects and developmental pipelines drive a sustained growth trajectory of about 4% annually.

Construction makes up 62% of all future pipeline projects across the Emirates, dwarfing the contribution from transport, power and water. Among construction subsectors, mixed-use projects lead the pipeline with about 42%, followed by residential real estate, data centres and hospitality.

The rise is underpinned by a strong record of contracts awarded: between 2020 and August 2025, contracts worth US$ 328.7 billion have been awarded across the UAE. The bulk of this activity has been concentrated in Abu Dhabi and Dubai, which together account for 85% of the total contract value—US$ 151 billion in Abu Dhabi and US$ 129.9 billion in Dubai.

Cost pressures are visible, especially in residential segments. Standard villas are built at about AED 4,200 per square metre, rising to AED 11,000 for luxury villas. Apartments range from around AED 4,300 to AED 9,500 per square metre, while commercial building costs hover between AED 5,500 and AED 7,300 per square metre in the first half of 2025.

Major developmental projects are shaping the skyline and infrastructure. Dubai is pushing ahead with expansions such as the Blue Line Metro and high-end masterplans including Palm Jebel Ali, The Oasis by Emaar, Marsa Al Arab, Naia Island, and the Venice at DAMAC Lagoons among others. Abu Dhabi is advancing a 150-kilometre high-speed rail link to Dubai plus a 131-kilometre metro project to support urban growth.

Population growth is playing a central role in demand dynamics. Under Dubai’s Urban Master Plan, its population is expected to grow from 3.4 million in 2020 to 5.8 million by 2040, fuelling demand for housing, commercial real estate, and infrastructure. Office space supply is set to increase, with approximately 8.2 million square feet under construction to be delivered by 2028—though demand is projected to outstrip supply. Hotel occupancy in Dubai averaged 81.4% in the first half of 2025, among the highest globally.

Differing sectoral profiles emerge between the Emirates. Dubai has focused heavily on construction, with 75% of its contract awards tied to that sector, while oil and gas account for only 3%. In contrast, Abu Dhabi maintains a more balanced portfolio: 40% of its contract awards go to oil and gas, 23% to construction. Residential delivery is also ramping up—Abu Dhabi has already delivered around 890 residential units in H1 2025, with approximately 33,074 units under development to be delivered through 2029. Apartments are expected to form 71% of that future housing supply.