Buying or renting in Dubai? The 2025 market guide you can’t ignore

Dubai’s real estate sector continues its dynamic growth trajectory in 2025, even amid a seasonal slowdown in the first quarter. Bolstered by strong macroeconomic fundamentals, an expanding population, and high investor confidence, the city is cementing its position as one of the most competitive and resilient property markets globally.

According to a recent Cavendish Maxwell report, Dubai recorded over 42,000 residential sales transactions in Q1 2025, reflecting a 10.0 per cent quarterly decline due to fewer project launches and seasonal factors. However, the year-on-year performance remains strong, with transaction volumes rising by 23.1 per cent and total sales value hitting Dhs114.4bn, up 29.6 per cent. Apartments led transaction activity, though demand for villas and townhouses also grew, signaling residents’ increasing preference for larger, family-oriented living spaces.

The UAE’s overall economy is forecasted to grow by 4.7 per cent in 2025, while Dubai is expected to register a 3.3 per cent increase in GDP. This consistent economic expansion, fueled by population growth and investor interest, is further reinforcing Dubai’s role as a global hub for investment and lifestyle migration.

Supply growth balanced by demand

Approximately 9,300 units were completed in Q1 2025, with Jumeirah Village Circle accounting for the highest number of handovers. An additional 73,000 units are expected by year-end, contributing to a projected 300,000 new units by 2028.

While prices and rents moderated slightly compared to 2024’s aggressive pace, growth remained positive. Property prices rose 2.8 per cent quarter-on-quarter and 15.8 per cent year-on-year, while rental prices increased by 1.0 per cent QoQ and 14.4 per cent YoY. Renewals now represent 70 per cent of rental contracts, largely due to the introduction of the Smart Rental Index, which standardizes pricing and curbs speculative increases.

Gross rental yields remained attractive, standing at 7.3 per cent for apartments and 5.0 per cent for villas, underscoring Dubai’s appeal for buy-to-let investors amid global interest rate uncertainty.

Investor-friendly policies continue to attract capital

Dubai’s real estate market continues to benefit from investor confidence underpinned by favorable government policies. Long-term residency programs, no income or capital gains tax, and a transparent legal framework have made the Emirate one of the most accessible and attractive investment destinations in the world.

“Few cities combine luxury, safety, connectivity, and investor-friendly policies the way Dubai does,” said Patrick Rouse, Chief Development Officer at Deyaar Development. “In 2025, we expect smart infrastructure, sustainability initiatives, and digital government services to elevate Dubai’s standing even further. For developers like Deyaar, this allows us to create next-generation communities—from tech-integrated homes to wellness-focused living in strategic growth corridors.”

Off-plan projects are experiencing high demand, thanks to flexible payment plans and the opportunity to invest early in communities designed for future value appreciation. According to Rouse, Deyaar’s recent off-plan launches have attracted robust interest from both end-users and international buyers looking to secure high-quality homes in an appreciating market.

Luxury segment driving long-term momentum

As the market matures, the focus is shifting from transaction volume to long-term value—especially in the ultra-luxury segment. High-net-worth individuals are increasingly choosing Dubai not only for secondary homes but as a base for family life and long-term residency.

“The market is evolving from volume to value,” said Mahdi Amjad, Founder and Executive Chairman of OMNIYAT Group. “We’re seeing sustained demand from global citizens who value lifestyle, architecture, and a sense of belonging. At OMNIYAT, we’re blending architecture, art, and hospitality into spaces that define a new paradigm of urban luxury.”

OMNIYAT’s latest projects, such as Lumena, an ultra-luxury commercial tower, and VELA Viento, a premier waterfront residential tower in Marasi Bay, have garnered global attention for their design-first approach and limited availability.

“What we’re witnessing is a market recalibration, not a peak,” Amjad added. “Our buyers are not speculators—they are people investing in generational homes and lifestyle assets. Dubai’s safe, clean, and connected environment supports this long-term vision.”

Rising relocation and end-user demand

One of the most notable trends in 2025 is the sharp increase in relocation demand. More residents—especially expats—are choosing to buy and settle in Dubai, supported by lifestyle advantages, remote work flexibility, international schooling, and a growing digital economy.

“There’s a definitive shift toward relocation,” Amjad said. “Dubai is no longer just a place to invest; it’s a place to live, raise a family, and build a future. This is influencing the way developers build—we’re focused on creating holistic homes, not just real estate assets.”

Mohamad Kaswani, General Manager of International Markets & Partnerships at Property Finder, echoed this trend. “Rents are at all-time highs, and that’s prompting many long-term renters to explore ownership. In fact, our rent vs. buy calculator consistently shows that buying becomes more financially viable when holding property for three to five years or more.”

Technology and PropTech revolutionise the sector

Dubai is at the forefront of adopting technology in real estate. From AI-powered analytics to blockchain-based smart contracts and immersive virtual tours, the city’s real estate experience is rapidly becoming digital-first.

“The UAE is emerging as a global innovation powerhouse,” said Kaswani. “The government’s commitment to AI and PropTech is visible, whether it’s the DLD launching a PropTech fund or the continuous stream of new startups entering the market.”

These innovations are making real estate transactions faster, more transparent, and more user-centric, especially for international investors who may not be physically present in the UAE.

Stable prime rents and high occupancy

While the pace of rent increases is moderating, occupancy remains extremely high, particularly in prime areas such as Downtown Dubai, Palm Jumeirah, and Dubai Marina.

“Rent prices remain stable in prime communities, with occupancy rates over 90 per cent,” Kaswani said. “This reflects a strong underlying demand base and a balanced market.”

The stabilization is seen as a sign of market maturity rather than cooling, with most experts forecasting continued resilience through the remainder of 2025.

Outlook: Strong fundamentals, sustainable growth

Dubai’s property market enters the second half of 2025 with strong tailwinds: population growth, infrastructure expansion, investor interest, and regulatory innovation. While supply will increase, it is expected to be absorbed steadily due to growing end-user demand and global appetite for Dubai’s lifestyle offering.

“As we look to the next two to three years, we fundamentally believe in the Dubai story,” Kaswani said. “With our leadership’s vision, smart regulation, and continued innovation, Dubai is not only resilient—it’s future-proof.”

This article was originally published in Gulf Business.