The 2025 IMD Smart City Index highlights major advancements by Middle Eastern cities, with Dubai jumping from 12th to a higher rank and Abu Dhabi climbing from 10th to 5th place, reflecting their strong push in urban innovation and smart infrastructure. Cities like AlUla, Kuwait City, and Manama are also emerging as serious smart city contenders. The report introduces six new cities to its assessment, totaling 146 globally, and spotlights the rising challenge of housing affordability, worsened by global trade tensions and rising development costs. It underscores how economic growth often leads to higher living costs, particularly in urban centers, due to limited affordable housing, gentrification, and speculative investment. Despite stability in the top 20 rankings, notable shifts include Taipei’s drop and Ljubljana’s rise. The index emphasizes a balanced approach to technology, sustainability, inclusion, and livability as the core of smart city success.