According to a report by betterhomes, an international proptech and real estate agency, Dubai had its best residential year on record for 2025, with total sales value reaching AED547 billion ($149 billion), up 28% year over year, across 203,000 transactions with a 20% increase in volume.
Investable stock continued to be the principal source of liquidity. 77% of sales were for studios and one- to two-bedroom flats, while 72% of purchases were between AED 500,000 and AED 3 million, supporting market depth and resale velocity.
According to the company’s Full-Year Dubai Residential Market Report for 2025, the residential market in Dubai concluded 2025 with a stable foundation for real estate activities due to low inflation and rapid economic growth.
While inflation stayed under control at 1.3% in 2025, the UAE’s real GDP grew 3.9% year over year in Q1 and 4.5% in Q2. Growth is expected to surpass 5% in 2026.
“What defines 2025 is the quality of growth rather than just the pace,” said Louis Harding, CEO of betterhomes. “Economic expansion, low inflation and population growth are reinforcing each other, creating a more durable foundation for real estate activity.”
“This was not a narrow or speculative cycle,” Harding added. “Liquidity was broad, repeatable and focused on segments where both end-users and investors continue to transact with confidence.”
The year was dominated by off-plan activity, which was mostly driven by apartments and accounted for 65% of all transactions and 53% of total value. Villas and townhouses contributed AED 221 billion (+26% YoY), while apartment sales totaled AED 325 billion (+29% YoY). Average sale prices increased 12% year over year to AED 1,673 per square foot despite a quickly growing supply pipeline, indicating the market’s ability to take in additional supply without price erosion.
The research stated that once mortgages reached 52%, transaction activity expanded to include leasing and sales.
Betterhomes leasing transactions increased by more than 60% year over year in 2025 as a result of robust family-led demand. Rents remained stable at an average of AED 207,000 annually despite increased volumes.
Rupert Simmonds, the Director of Leasing at betterhomes, said: “Leasing momentum in 2025 came from people moving forward, not prices running ahead. Stable rents alongside higher transaction volumes reflect a market driven by families and long-term tenants making deliberate housing decisions.”
Mortgages accounted for 52% of deals, surpassing cash, while buyer demand increased by 33% year over year. For the fourth year in a row, investors accounted for 57% of purchases. While Dubai’s luxury market expanded, with average prime selling prices rising 26% year over year to AED 30 million, India and the UK remained the top buyer countries.
According to Betterhomes’ 2026 forecast, Dubai’s 2025 performance indicates a residential market driven more by structural fundamentals than by excess.
The sector approaches 2026 from a position of broad demand, robust liquidity, and structural resilience, it continued, with economic growth picking up speed, population growing, and pricing being stable despite rising supply.
