Dubai’s real estate market kicked off 2025 with impressive momentum. According to Dubai Land Department (DLD) data, total sales value jumped 29% year-on-year to AED114 billion in the first quarter. Sales volume increased by 23% compared to the same period in 2024.
Off-plan properties drove much of this growth, with 24,920 transactions in Q1-25, up from 20,006 in Q1-24. The ready property market wasn’t far behind, with transaction values climbing from AED43.90 billion to AED60.20 billion in the first three months of 2025.
Dubai South and Al Furjan emerged as the hottest areas, recording growth of 26.37% and 21.56% respectively. The average property sale price stood at AED2.7 million in Q1 2025, making homeownership more accessible to residents.
This strong performance reflects deep investor confidence in Dubai’s regulatory system and infrastructure. The city’s commitment to innovative development continues to attract both regional and international investors looking for stable returns on their money.
Meanwhile, the rental market is undergoing significant changes. Average rents increased by 14%, from AED71 to AED81 per square foot. However, there’s a clear shift away from renting, with rental contract renewals down 9% and new rental contracts dropping by 19%.
This doesn’t mean rental prices will crash anytime soon. Instead, the 13% decrease in rental transaction volume points to a market finding a new balance. As more residents choose to buy rather than rent, landlords will need to adjust their expectations, potentially leading to a more stable rental market over time.
Deeper Insights from the Data
Looking more closely at the numbers, several important trends emerge that paint a fuller picture of Dubai’s evolving real estate landscape:
The gap between off-plan and ready property transactions suggests a forward-looking market. Buyers are increasingly willing to invest in future developments, indicating strong long-term confidence in Dubai’s growth trajectory and economic stability.
The AED2.7 million average sales price reveals a market that’s becoming more accessible while still maintaining premium value. This sweet spot allows for both entry-level investors and luxury buyers to find opportunities, creating a more diversified buyer pool than in previous cycles.
The geographical shift toward areas like Dubai South and Al Furjan points to successful urban expansion beyond traditional hotspots. These emerging neighbourhoods are benefiting from improved infrastructure, connectivity, and amenities, redistributing population density and investment across the emirate.
The decline in rental contracts alongside rising purchase transactions indicates a fundamental shift in resident mentality. After years of transient living, many expatriates now see Dubai as a long-term home worth investing in rather than simply a temporary career stop.
The 14% increase in rental rates despite dropping demand presents an interesting paradox. This suggests that while fewer people are renting overall, those who continue to rent are willing to pay premium prices for quality properties in preferred locations, creating a more stratified rental market.
The 19% drop in new rental contracts paired with the 9% decline in renewals reveals that the shift toward homeownership is happening at both ends of the tenant spectrum — both new arrivals and long-term residents are choosing to buy rather than rent.
These trends collectively indicate Dubai’s real estate market is maturing beyond its boom-and-bust reputation toward a more sustainable model that balances growth with stability, luxury with accessibility, and investment with genuine homeownership.
