Dubai’s residential real estate market demonstrated continued strength in the first quarter of 2025, with transaction volumes increasing 23 per cent year-on-year to 42,274 sales across both secondary and off-plan markets, according to a new report from Espace Real Estate.
The quarter saw robust activity despite early signs of market stabilisation, with transaction volumes declining 10 per cent quarter-on-quarter amid broader global economic uncertainty.
“The Dubai residential real estate market continues to demonstrate remarkable resilience and growth in Q1 2025. Transaction volumes remained robust, buoyed by sustained demand for both off-plan and ready properties,” John Lyons, Managing Director at Espace Real Estate said.
Luxury Dubai homes see 101% price surge as market grows
Off-plan transactions accounted for 59 per cent of all residential deals, continuing a trend observed throughout 2024, the report said.
The report notes a shift in investor sentiment away from speculative buying towards a more measured pace that could support long-term market health.
The luxury segment saw particularly strong performance, with properties priced above AED 20 million recording the largest increase in transaction activity both year-on-year and quarter-on-quarter in the secondary market.
Villa and townhouse communities showed significant price appreciation, with 19 of the 20 tracked communities recording increases, averaging 23 per cent.
Emirates Hills led with a 101 per cent price increase, followed by Jumeirah Islands at 52 per cent.
Apartment communities also saw price growth across all 11 tracked areas, though at a more moderate average of 10 per cent, with the Views area recording the highest increase at 17 per cent.
Quarter-on-quarter figures in the secondary market recorded an increase in transaction volume, indicating a continued shift among tenants toward homeownership.
This trend is supported by an 8 per cent decline in villa/townhouse rental contracts and a 17 per cent decrease in apartment rental contracts compared to Q1 2024.
Dubai rental market contracts as more residents buy homes
Despite fewer rental transactions, rental prices continued to climb, with villa rentals increasing by an average of 19 per cent year-on-year.
Emirates Hills and Tilal Al Ghaf saw the highest increases at 33 per cent and 47 per cent respectively.
Apartment rentals rose by an average of 11 per cent, with City Walk recording the highest increase at 19 per cent.
Buyer activity reflects Dubai’s growing international appeal, with increased geographic diversification in foreign investment.
“At Espace Real Estate, buyer activity continues to show that Dubai remains highly appealing to a global audience, with a diverse mix of buyer nationalities. While Western European countries continue to feature prominently, we are now observing increased geographic diversification, with growing interest from Eastern Europe. This shift underscores Dubai’s widening international appeal” Lyons said.
The off-plan market saw 7,008 completed units in Q1 2025, representing a 15 per cent decrease compared to the same period last year.
As market conditions evolve, the report suggests the current moderation may ultimately contribute to more sustainable long-term growth for Dubai’s property sector.
