Capital growth
Capital growth is the rise in a property's value over time, as distinct from the rent it earns; with yield, it makes up the total return.
What Capital growth means for a buyer
Investors judge property on two returns: income, measured as gross or net yield, and capital growth, the change in value between buying and selling. Total return is the two together, less the costs of buying, holding and selling.
Dubai's record shows why growth should never be assumed. Prices fell by roughly half after the third quarter of 2008, slid by about a quarter to a third between a 2014 peak and a late-2020 trough, then more than doubled on Property Monitor's average to August 2025. ValuStrat's index (January 2021 = 100) stood at 218.6 in September 2026, 4.5% lower than a year earlier. The full sourced history is in our price history guide.
Three cautions when you read a growth figure:
- What is measured. Asking prices or registered sales, averages or indices, per square foot or per home. Averages move with the mix of homes sold.
- Which segment. In April 2025 ValuStrat had villas 63% above their 2014 peak and apartments still 7% below theirs.
- Net of costs. In Dubai the buyer pays a 4% transfer fee that is not recovered on sale, plus agents' fees on resale, so a small rise can still be a loss.
The UAE does not tax an individual's gain on sale, but your country of residence may.
Guides that use this term
Where Capital growth comes up in practice, with the costs, rules and steps around it.
Questions about the buying process?
An adviser can explain how this applies to the property you're considering.
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