Dubai real estate: 73,000 homes to be delivered in 2025 as property sales hit $31bn

Dubai will add 73,000 residential units to its housing stock this year, with 300,000 units expected by the end of 2028, according to research from property consultant Cavendish Maxwell.

The emirate recorded 42,000 property sales transactions worth AED114.4 billion in the first quarter of 2025, despite a 10 per cent decline compared to the final quarter of 2024. Sales increased 23 per cent compared to the same period last year.

“Dubai’s property market is on track for a modest annual increase in terms of sales volumes and values, but there are indications that prices are beginning to stabilise. 2025 began with a brief dip in prices per sq ft, followed by a steady recovery. While prices are still on the up, the pace is showing signs of slowing down. For example, the average quarterly price increase for 2023 and 2024 was 4 per cent, compared to a 2.8 per cent rise in Q1 this year against Q4 2024,” Ronan Arthur, MRICS, Director and Head of Residential Valuation at Cavendish Maxwell said.

“With a weakened US dollar, strong rental returns and appealing yields, Dubai continues to attract local and international property investors. We expect this trend to continue throughout the year,” Arthur added.

Off-plan sales dominated the market with a 70 per cent share, reaching AED77.5 billion across 29,000 transactions. This marked a 32 per cent increase on the first quarter of 2024. Secondary market sales totalled 13,200 transactions, up 6.6 per cent year-on-year.

Apartments accounted for 75 per cent of all transactions, though their market share declined as buyers showed increased interest in larger properties. Townhouses represented almost 17 per cent of sales and villas just over 7 per cent.

Property prices reached AED1,535 per square foot, up 2.8 per cent quarter-on-quarter and nearly 16 per cent higher than in the first quarter of 2024.

Dubai luxury property sales reach 590 transactions above AED20 million

The luxury property segment recorded 590 sales for properties worth AED20 million or more, compared to 480 in the same period last year. Almost 60 homes sold for AED50 million or above.

Arthur noted that off-plan property sales accounted for 67 per cent of luxury transactions and nearly a third of ultra-luxury sales.

More than 180,000 units will be delivered in 2026 and 2027 when a surge in project completions is anticipated, Cavendish Maxwell said.

Jumeirah Village Circle leads Dubai property completions with 4,330 new units

“Demand from high-net-worth individuals (HNWIs) is fuelled by Dubai’s favourable tax policies, long-term residency incentives and global connectivity. And while the ultra-luxury segment – properties valued at AED50 million or more – has limited supply, transaction volumes continue to show steady performance. Despite quarterly fluctuations, this segment remains stable, solidifying its position as a niche investment class for elite buyers from the UAE and internationally,” Arthur added.

Jumeirah Village Circle led project completions in the first quarter with 4,330 units delivered. The area also recorded the highest number of apartment sales with 3,330 transactions, including nearly 2,200 off-plan purchases and 1,132 secondary market deals.

Mohammed Bin Rashid City came second for completions with 1,037 units, followed by Business Bay with 743 units, Downtown Jebel Ali with 647 units and Rukan with 636 units.

For future supply, Jumeirah Village Circle tops the list with nearly 27,100 units due between now and the end of 2028. Business Bay follows with 19,470 units, then Azizi Venice with 17,100 units, DAMAC Lagoons with 10,730 units and Arjan with 9,750 units.

Apartments represented almost 80 per cent of all completed projects from January to March. During the same period, 95 real estate projects were launched, delivering nearly 28,600 new units.

DAMAC Islands recorded the highest number of off-plan villa and townhouse sales with 1,430 transactions, followed by The Valley, DAMAC Hills 2, Villanova and DAMAC Lagoons.

For secondary villa and townhouse sales, DAMAC Hills 2 led with 318 transactions, followed by Al Furjan, Emirates Living, Reem and Jumeirah Village Circle.

Dubai rental yields average 7.3% for apartments as growth rate slows to 1%

Residential rents increased 14.4 per cent compared to the first quarter of 2024, though the quarterly growth rate slowed to 1 per cent compared to the final quarter of 2024. This represented the lowest quarterly increase in two years, compared to previous quarterly rises ranging from 2 per cent to 6 per cent.

“This slower pace of growth could be partly driven by the influx of new units delivered in the first three months of the year, as well as the Dubai Smart Rental Index, introduced at the beginning of the year, which is likely to influence tenant expectations and price adjustments. With additional supply on the way, monitoring how rental trends evolve in response to increasing inventory and a shifting, regulatory framework will be crucial,” Arthur said.

At the end of March 2025, rental yields averaged 7.3 per cent for apartments and 5 per cent for villas and townhouses.

Dubai Investments Park offered the highest apartment rental yields at 10.3 per cent, followed by International City at 9.1 per cent, Downtown Jebel Ali at 9 per cent, Dubai Production City at 8.6 per cent, Dubai Silicon Oasis at 8.5 per cent, Dubai Sports City at 8.4 per cent, and Liwan and International City Phase 2 both at 8.2 per cent.

For villas and townhouses, Industrial City led with yields of 6 per cent, followed by Jumeirah Village Circle at 5.9 per cent, DAMAC Hills 1 and 2 both at 5.7 per cent, International City and Serena both at 5.5 per cent, Mudon and Villa Nova both at 5.4 per cent, and Dubai Hills Estate at 5.3 per cent.

This article is originally published in Arabian Business.