Dubai's Residential Real Estate Market Surges 23% in Q1 2025, Led by Luxury Sales
Dubai’s residential real estate market showcased remarkable strength in the first quarter of 2025, recording a 23% year-on-year increase with 42,274 property sales across both off-plan and secondary markets, according to a new report by Espace Real Estate.
Despite a 10% quarter-on-quarter dip due to global economic uncertainties, demand for Dubai’s real estate remained strong. "Dubai’s property market continues to show incredible resilience, supported by steady demand for both off-plan and ready properties," noted John Lyons, Managing Director at Espace Real Estate.
Off-Plan Transactions and Shifting Buyer Behavior
Off-plan sales accounted for 59% of all residential transactions, continuing a trend observed throughout 2024. The report highlights a shift among investors toward more strategic, long-term investments, moving away from speculative buying patterns of the past.
Luxury Segment Drives Market Growth
The luxury property segment saw exceptional growth, especially for homes priced above AED 20 million. This segment recorded the highest surge in transactions, both quarterly and annually, within the secondary market.
Villas and townhouses witnessed notable price growth across 19 of 20 communities tracked, with an average price increase of 23%. Emirates Hills stood out with a staggering 101% price hike, while Jumeirah Islands followed with a 52% rise.
Steady Growth in Apartment Communities
Apartment prices also climbed, albeit more moderately. All 11 areas tracked reported price increases, averaging around 10%. The Views emerged as the top performer, achieving a 17% rise in apartment values. A noticeable uptick in secondary apartment sales suggests a growing shift from renting to homeownership.
Rental Market Trends: Contracts Down, Prices Up
Despite an 8% drop in villa/townhouse rental contracts and a 17% fall in apartment rental contracts compared to Q1 2024, rental prices continued to climb. Villa rents surged by an average of 19% year-on-year, with Emirates Hills and Tilal Al Ghaf seeing the highest increases at 33% and 47%, respectively. Apartment rental rates rose by 11% on average, with City Walk experiencing the steepest jump at 19%.
International Buyers Drive Demand
Dubai’s appeal to global investors continues to broaden. The city’s real estate market has seen increased interest from a wider range of nationalities, particularly from Eastern Europe, alongside its traditional stronghold of Western European buyers. Lyons commented, "Dubai's international allure is stronger than ever, as we see a more geographically diverse mix of buyers entering the market."
Off-Plan Deliveries and Future Outlook
In Q1 2025, 7,008 new units were completed — a 15% decline from the same period last year. Analysts suggest that this slowdown in new project completions could support more sustainable growth in Dubai’s property sector over the long term.
