Dubai’s real estate market is entering a pivotal stabilisation phase in 2025, signifying a maturing and sustainable investment landscape.
Following a remarkable surge that saw residential property prices soar by approximately 60% from 2022 to early 2025—driven by strong international demand—the market is transitioning toward equilibrium. This shift reflects a healthy evolution, offering investors a more predictable and strategic environment, as highlighted by Asico, a leading Dubai-based real estate brokerage and developer.
As of January 2025, the average price per square foot in Dubai’s residential sector stood at Dh1,484, marking a modest 0.57% month-on-month decline. This subtle dip indicates a cooling from the frenetic price escalations of recent years, suggesting a market recalibrating for long-term stability. Despite this adjustment, transaction activity remains vigorous. In February 2025, Dubai experienced a 32% increase in transaction volume and a 37% rise in value compared to February 2024, totaling over Dh50 billion. This resilience underscores the emirate’s enduring appeal as a global real estate hub.
A notable trend reshaping the market is the growing demand for mid-market and affordable housing. In 2024, two out of five ready home sales were valued at less than Dh1 million, marking a clear departure from the dominance of luxury properties. This broadening appeal reflects a more inclusive market, catering to a diverse buyer base and fostering sustainable growth. While high-net-worth individuals continue to gravitate toward premium developments in areas like Palm Jumeirah and Downtown Dubai, where properties often exceed Dh5 million, the rise of mid-tier options signals a market maturing beyond speculative frenzy.
The off-plan segment remains a cornerstone of Dubai’s real estate dynamism, with a 38% increase in transaction volume and a staggering 60% surge in value year-over-year in February 2025. Prime locations such as Dubai Creek Harbour, Mohammed Bin Rashid City, and Dubai Hills are leading this charge, attracting investors with their blend of modern infrastructure and strategic positioning. Off-plan properties, typically priced 10-20% below ready homes, continue to entice buyers eager for capital appreciation and rental yields, which average 6-8% annually in key areas.
Developers are actively addressing the market’s growing demands. In response to robust activity, they are accelerating construction schedules, moving handover dates forward by three to six months. This agility aims to prevent potential shortages and maintain market balance, ensuring that supply can meet rising demand.
However, ratings agency Fitch has issued a caution regarding an impending price correction, projecting a possible double-digit decline in the second half of 2025 and into 2026. This forecast aligns with a planned delivery of 210,000 units during 2025 and 2026, nearly doubling the volume of the previous three years. According to Fitch, this surge in supply could depress property prices by up to 15%, marking a stark pivot from the post-pandemic boom.
Wail Abualhamail, director of Real Estate at Asico, views this stabilisation as a sign of positive market evolution. “The current phase reflects a maturing market, transitioning from speculative buying to strategic, long-term investments,” he remarked. This evolution signals enhanced investor confidence, refined regulations, and a sustainable future for Dubai’s real estate sector.
Market experts emphasize that this stabilisation signifies a new chapter for Dubai’s property landscape, characterized by resilience, diversity, and strategic growth. “As the market matures, it continues to affirm its position as a global leader, offering investors a stable yet dynamic platform for long-term success,” noted a spokesperson from a Dubai realty brokerage.
Asico’s insights paint a picture of a marketplace where quality, careful planning, and prime locations are now the primary drivers of returns, veering away from short-term speculation. This paradigm shift presents an opportunity for investors to engage with the market in a more thoughtful manner.
Bolstering this optimistic outlook are Dubai’s strategic initiatives. The Dubai Economic Agenda (D33), aiming to double the emirate’s economy by 2033, outlines real estate as a vital growth driver. Policies like the Golden Visa programme, which offers long-term residency to property investors, and 100% foreign ownership in selected sectors, have solidified Dubai’s position as a global investment destination. In 2024, the emirate attracted over Dh300 billion in real estate investments, with foreign buyers accounting for a remarkable 40% of this figure, according to data from the Dubai Land Department.
As Dubai’s property market stabilizes, investors find themselves in a landscape rich with opportunity. The growing focus on mid-market properties broadens investment avenues, while sustained demand emphasizes the sector’s long-term strength. For buyers, this phase presents a chance to make informed decisions within a more predictable environment, where quality and prime location take precedence over fleeting speculative gains.
