Dubai Real Estate Enters a Stabilisation Phase
The Dubai real estate market is currently undergoing a notable transition, characterized as a healthy "stabilisation phase," according to insights from brokerage and developer Asico. This shift comes after an impressive period of growth, where residential property prices soared by around 60% between 2022 and early 2025. This surge was largely driven by strong international investor interest, signaling a vibrant market up until this point.
Key Indicators of Stabilisation
Several critical indicators highlight this transition toward stabilisation:
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Price Adjustments: As of January 2025, the average price per square foot in Dubai was AED1,484 ($404). This figure reflects a minor 0.57% dip month-on-month, which suggests a cooling off from the rapid price escalations seen previously. Such price adjustments are expected in a maturing market as it finds a balance between demand and supply.
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Shift in Demand: The market is witnessing a pronounced shift in buyer preferences. While luxury properties continue to captivate investors, there is a significant trend toward mid-market and affordable housing options. Notably, in 2024, two out of every five ready home sales were valued below AED1 million ($272,000). This shift indicates a broader market appeal and a strategic move towards sustainable growth, catering to a wider demographic.
- Supply Dynamics: In response to changing market conditions, developers are ramping up construction schedules. Many are expediting project handovers by three to six months to meet current demand and avoid potential shortages. This proactive approach contributes to a more balanced, equitable market and reflects a forward-thinking attitude among developers.
Insights from Industry Experts
Wail Abualhamail, the Director of Real Estate at Asico, comments, “The current phase of stabilisation reflects the natural progression of a maturing market. We are seeing a shift from speculative buying towards more strategic, long-term investments.” This evolution is viewed as a positive sign, indicating enhanced investor confidence, improved regulatory frameworks, and paving the way for a more sustainable future in Dubai’s real estate arena.
Despite the stabilisation, the market continues to exhibit resilience and robust performance. For instance, in February 2025, there was a remarkable 32% increase in transaction volume and a 37% rise in transaction value compared to the previous year, totaling over AED50 billion ($13.6 billion).
The Off-Plan Market’s Ongoing Growth
The off-plan sector of the market remains a key contributor to this vibrant activity. Reports indicate a 38% increase in transaction volume and a 60% rise in value year-over-year for off-plan properties. Areas like Dubai Creek Harbour, Mohammed Bin Rashid City, and Dubai Hills have become particularly sought-after locations for off-plan investments, reflecting a shift in investor strategy toward high-potential areas.
Government Initiatives Fueling Market Growth
The Dubai government’s strategic initiatives also play a crucial role in enhancing the real estate landscape. The Dubai Economic Agenda (D33), designed to double the emirate’s economy by 2033, focuses on propelling the real estate sector’s contribution to this growth. Meanwhile, policies such as the Golden Visa programme and provisions for 100% foreign ownership in specific sectors have further solidified investor confidence.
Asico emphasizes that this phase of stabilisation presents investors with opportunities to make informed decisions in a more predictable environment. The emerging focus on mid-market properties not only opens avenues for diverse investments but also signals the market’s enduring strength.
Looking Ahead
In summary, the stabilisation period is indicative of a maturing property sector in Dubai, where quality, strategic planning, and location are set to be the dominant factors driving long-term returns. This departure from short-term speculation signifies a promising shift towards a more sustainable, resilient market structure, benefiting both investors and the wider economy.
