Demand Base Remains Strong as Market Evolves
The Dubai real estate market is experiencing a surge, with May 2025 setting a remarkable new record. A staggering AED 66.8 billion in sales marks a 49.9% increase compared to the same month last year. This growth highlights the market’s resilience and adaptability in an ever-evolving economic landscape.
According to a recent update from fäm Properties, the total of 18,693 transactions in May makes it the second-best selling month on record in terms of volume. This impressive statistic underlines the strength of Dubai’s property market amidst changing demands and investment patterns.
Firas Al Msaddi, the CEO of fäm Properties, emphasized that the data from DXBinteract indicates a stable market free from immediate threat of oversupply in the residential sector. However, the commercial real estate scene is facing a different challenge: a significant undersupply of office space, driven by robust demand.
Addressing forecasts like the one from Fitch Ratings predicting a 15% correction in Dubai residential property prices, Al Msaddi clarified, “While growth has slowed, that’s not the same as a correction.” He suggests that the slowdown is indicative of a market growing into maturity rather than presenting signs of weakness.
Al Msaddi noted that over the next five years, around 363,000 residential units are expected to be delivered in Dubai, but with a significant number still in the early stages of construction. Currently, only about 12,000 units are nearing completion, dispelling the notion of market-wide oversupply. Interestingly, project deliveries in 2024 are projected to be down 23% compared to 2023, reinforcing the idea that the market remains tightly controlled.
In specific areas, temporary price adjustments might occur. For instance, Jumeirah Village Circle is poised to receive around 20,000 new units over the next four to five years, which could exert short-term pressure on prices. However, Al Msaddi reassured that this localized fluctuation doesn’t mirror the overall market condition. With a strong demand base, he expects market absorption to keep pace with supply.
On the commercial side, the undersupply of quality office space is stark. Al Msaddi pointed out that high-quality commercial properties are scarce, particularly in prime business areas, indicating that no significant price correction is anticipated in this segment; instead, value appreciation appears to be the trend.
The trajectory of property sales in Dubai has been impressive, showing a steady increase in value over the past five years. From AED 2.3 billion in 2020 to AED 66.8 billion in May 2025, this growth showcases the surging investor confidence and attraction to the Dubai real estate market.
Notably, the month of May saw the sale of a luxury villa on Palm Jumeirah for AED 300 million, while a prime apartment at Jumeirah Residences Asora Bay reached AED 164 million. These transactions exemplify the high-end appeal and robust investment opportunities within the market.
An additional factor propelling this growth is the influx of high-net-worth individuals. According to DXBinteract’s data, while London has seen a significant exodus of millionaires, Dubai has welcomed a staggering 212% increase in its wealthy population over the past decade. Al Msaddi describes this trend as a shift in global investor confidence towards Dubai, positioning the city as a secure environment for both living and investment.
An intriguing statistic from May shows that properties valued over AED 5 million comprised 14% of total sales. In contrast, 30% of sales were within the AED 1-2 million range, with 26% below AED 1 million. This diversity in price points indicates a broad appeal across different investor segments, with first sales from developers significantly outpacing resales—66% to 34% in terms of volume, and 67% to 33% in overall value.
