Is Dubai’s real estate market heading for another record-breaking year, or will 2025 convey a slowdown? This is a query many customers, residence proprietors, and potential buyers are asking. With residential real estate sales climbing by 31 percent year-over-year to AED 232 billion ($ 63.2 billion) within the second half of 2024, the market’s growth has been nothing short of remarkable. However, questions arise about whether or not or no longer this boom may be sustained.
Despite A 35% Price Increase In One Area, Dubai Real Estate Sales Reached $63 Billion In H2. Will They Rise In 2025?
Record Sales In The Residential Sector
The latest report tracking 31 communities in Dubai revealed impressive figures for the residential sector. The off-plan market dominated, accounting for 61,435 sales, which marked a 74 percent increase YOY. These transactions amounted to AED 127 billion ($34.6 billion), showcasing a 51 percent rise compared to the same period last year. Meanwhile, the secondary market also showed strength, with 32,487 transactions representing a 15 percent YOY increase. This robust performance underscores the enduring demand for homes in Dubai.
Increasing Demand For Villas And Apartments
In 19 of the 20 tracked villa communities, average prices rose substantially. Established communities such as Springs saw a 26 percent price increase, while Town Square experienced a 21 percent rise. Meanwhile, luxury villa developments in areas like Jumeirah Golf Estates recorded a staggering 35 percent jump in prices. Newer communities like Al Furjan also saw a 26 percent price increase, driven by buyers seeking value after being priced out of other neighborhoods.
The apartment market mirrored this trend, with prices rising in 10 of the 11 tracked apartment communities. High demand, coupled with new handovers, contributed to a 34 percent increase in transaction volume in communities like Emaar Beachfront. Similarly, Jumeirah Village Circle (JVC) recorded a 28 percent rise in transactions, fueled by ongoing expansions and the completion of 24 new projects in 2024.
Population Growth Drives Demand
Dubai’s population growth continues to fuel the real estate market. Over the last decade, the population has grown by 65 percent, with a 10 percent increase in the past three years alone. This rapid growth has brought in both new residents and increased demand for housing. The shift in buyer demographics is also notable, with many buyers.
Supply Challenges In The Villa Market
Despite strong demand, the supply of villas and townhouses remains limited. Only 5 percent of upcoming projects include villas, and just 15 percent are townhouses. This constrained pipeline has created an imbalance in the market, pushing prices upward. Developers are expected to focus on launching more off-plan projects to meet the growing demand, but absorption rates could moderate as the market moves toward greater balance.
Also Read: Amis Development Completes Enabling Works On A $115 Million Luxury Project In Dubai.
Growing Popularity Of The Off-Plan Market
The off-plan market now accounts for 65 percent of all transactions in the residential sector, compared to 61 percent in the first half of 2024. Developers’ efforts to launch new projects every 18 hours in early 2024 have significantly boosted this segment. In total, the off-plan market reached AED 127 billion ($34.6 billion) in value. Buyers are increasingly attracted to off-plan properties due to flexible payment plans and the promise of high returns upon completion.
Rising Prices Across Communities
Established communities like Jumeirah Islands and Dubai Hills have seen notable price increases of 26 percent and 27 percent, respectively. These rises are attributed to the refurbishment of older properties and the introduction of new luxury offerings. Furthermore, communities like Arabian Ranches have seen prices grow by 27 percent, reflecting strong buyer interest. The trend is not limited to villas; apartment communities like Emaar Beachfront have recorded significant transaction volume growth, driven by handovers and increased buyer interest.
Mortgage Trends And Buyer Behavior
Mortgage activity in Dubai has surged, with leads generated increasing by 111 percent YOY. This growth indicates that more residents are committing to long-term homeownership. The number of property viewings also rose by 30 percent compared to the second half of 2023, reflecting heightened buyer activity. Registrations for potential buyers increased by 10 percent, further showcasing the robust demand in the market.
Impact Of New Developments
New developments continue to play a crucial role in shaping Dubai’s real estate landscape. In addition to the 24 projects completed in JVC, other neighborhoods have benefited from a steady stream of new launches. Around 80 percent of these new properties are apartments, highlighting the city’s reliance on this segment to meet demand. Developers are expected to maintain this momentum, with more off-plan launches anticipated in 2025.
Arshad Darbar’s Perspective
Arshad Darbar, a seasoned real estate expert, views Dubai’s recent property market growth as a natural outcome of its unique economic and social dynamics. According to Darbar, the impressive 31% year-over-year rise in residential sales, reaching AED 232 billion in the latter half of 2024, is a testament to Dubai’s global appeal and economic stability. He highlights the surge in villa prices, particularly the 35% increase in areas like Jumeirah Golf Estates, as indicative of a strong shift towards high-end living preferences among buyers.
Darbar believes that the limited supply of villas, coupled with increasing population growth, will continue to drive demand. However, he cautions that the market’s dependence on off-plan sales, which now comprise 65% of transactions, could create challenges if absorption rates slow. Darbar also emphasizes the importance of new developments, noting their role in sustaining market momentum. Yet, he advises developers and investors to remain mindful of market balance to ensure long-term stability.
In his view, 2025 may bring moderated growth, but Dubai’s market fundamentals remain robust, making it a resilient and promising investment hub.
Conclusion
Dubai’s real estate market has experienced unprecedented growth, driven by strong demand, population increases, and a thriving off-plan segment. While 2025 is expected to bring further price growth, the pace may slow as the market seeks equilibrium. With developers continuing to launch new projects and buyers showing sustained interest, Dubai remains a top destination for real estate investment.
