Dubai’s real estate market performed very well in the first quarter of 2025, with an estimated 42,274 transactions. This showed that there has been a 23% increase over the same time the previous year. According to an analysis, this growth happened in both secondary and off-plan marketplaces.
The market stayed active despite early indications of market stabilisation, as seen by a 10% drop in transaction volumes from the prior quarter. In the first quarter of 2025, the Dubai residential real estate market showed remarkable growth and durability.
Off-Plan Market Dominates
59% of all residential transactions were off-plan, which was consistent with the 2024 trend. This change in investor conduct supports the market’s long-term stability by reflecting a move away from speculative purchasing and towards a more steady strategy.
Luxury Market Sees Strong Activity
The luxury real estate market flourished with the highest sales of over AED 20 million during the year-over-year and quarter-over-year. Not only this, but there has been an increase in the prices of villas and townhouses, with an average increase of 23% in 19 of the 20 areas under study. However, it is important to note that the largest price hikes were seen for Emirates Hills and Jumerirah Islands which were 101% and 52% respectively.
Apartment Market Also Experiences Growth
Apartment communities also saw price increases across all 11 tracked areas, though at a more moderate average of 10%. The Views area saw the highest increase at 17%. In the secondary market, there was a rise in transaction volume from the previous quarter, indicating that more tenants are shifting towards homeownership.
Rental Market Shows Decline, But Prices Rise
Although rental contracts for villas and townhouses decreased by 8%, and apartment rental contracts dropped by 17% compared to Q1 2024, rental prices continued to rise. Villa rents increased by an average of 19%, with Emirates Hills and Tilal Al Ghaf seeing the highest increases at 33% and 47%, respectively. Apartment rents rose by an average of 11%, with City Walk recording the highest increase at 19%.
Dubai Gaining International Attention
Dubai’s growing international appeal is reflected in the increased geographic diversity of foreign buyers. “At Espace Real Estate, we see that Dubai remains a top choice for buyers worldwide, with a growing mix of nationalities. While Western European buyers continue to be prominent, we are also seeing increasing interest from Eastern Europe, showing Dubai’s expanding global appeal,” Lyons commented.
The off-plan market saw 7,008 completed units in Q1 2025, a 15% decline compared to last year. However, this moderation may support more sustainable growth in Dubai’s property market in the long term.
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