Dubai’s real estate market showed strong resilience in the first quarter of 2025. This has resulted in a 23% increase in transaction volume to achieve 42,274 sales in the secondary and off-plan markets, according to ESPACE Real Estate.
Despite previous information on market stabilization, the quarter recorded robust activity. This has resulted in less than quarterly declines in trading volume compared to quarters of 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,” said John Lyons, Managing Director at Espace Real Estate.
Off-plan transactions include 59% of all home transactions and trends remained in place over 2024, as stated in the report. The displacement of this study reflects the deduction from speculative purchases to a more measured approach that can support long-term market health.
Luxury Segment Experiences Surge in Transaction Activity
The luxury segment exhibited 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 experienced significant price appreciation, with 19 of the 20 tracked communities reporting increases, averaging 23 percent. Emirates Hills led the way with a remarkable 101 percent price increase, followed closely by Jumeirah Islands at 52 percent.
Apartment communities see price growth
The apartment community also recorded price growth in all 11 persecuted areas, despite an average of 10%. Viewing areas recorded a top increase at 17%. The secondary market quarter showed an increase in trading volume. This shows a continuous shift in tenants towards residential real estate.
Decline in rental contracts yet prices continue to rise
There’s been a noticeable drop in rental activity compared to Q1 2024, with villa and townhouse rental contracts falling by 8% and apartment rentals down by 17%. Despite the slowdown in signed leases, rental prices have continued to climb. On average, villa rents rose by 19% year-on-year, with Emirates Hills and Tilal Al Ghaf seeing the biggest jumps at 33% and 47%, respectively. Apartment rents also increased, averaging an 11% rise, with City Walk leading the way at 19%.
Growing international appeal of Dubai
Buyer activity reflects Dubai’s expanding international appeal, with a notable increase in 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 remarked.
In Q1 2025, 7,008 units were finished in the off-plan sector, a 15% drop from the same time the previous year. According to the report, this current pullback may eventually lead to more sustainable long-term growth for Dubai’s real estate industry as market conditions change.
