Dubai’s residential real estate market showed strong performance in the first quarter of 2025, with property transactions rising 23 percent year-on-year, totaling 42 274 sales across both secondary and off-plan markets. This information comes from a recent report by Espace Real Estate.

The quarter witnessed robust activity, even amidst early signs of market stabilization, with transaction volumes declining by 10 percent compared to the previous quarter against a backdrop of global economic uncertainty. John Lyons, Managing Director at Espace Real Estate, noted that the market continues to demonstrate remarkable resilience and growth, driven by sustained demand for both off-plan and ready properties.

Off-plan transactions represented 59 percent of all residential deals, a trend that has persisted since 2024. The report highlights a shift in investor sentiment, moving away from speculative buying towards a more measured approach, which may support long-term health in the market. The luxury segment performed particularly well, with properties priced above AED 20 million experiencing the greatest increase in transaction activity both year-on-year and quarter-on-quarter in the secondary market.

Communities of villas and townhouses reported significant price growth, with 19 out of 20 tracked communities experiencing increases, averaging 23 percent. Emirates Hills led the way with a remarkable 101 percent price surge, followed by Jumeirah Islands at 52 percent. Apartment communities, while still growing, showed a more moderate average increase of 10 percent, with the Views area marking the highest increase at 17 percent.

The secondary market also recorded an increase in transaction volume quarter-on-quarter, reflecting a growing trend among tenants toward homeownership. This shift is supported by an 8 percent decline in villa/townhouse rental contracts and a 17 percent decrease in apartment rental contracts compared to Q1 2024.

Despite the drop in rental transactions, rental prices rose, with villa rentals increasing by an average of 19 percent year-on-year. The highest increases were seen in Emirates Hills and Tilal Al Ghaf, at 33 percent and 47 percent, respectively. Apartment rentals also grew, averaging an 11 percent increase, with City Walk experiencing the highest rise at 19 percent.

Buyer activity indicates that Dubai is increasingly appealing to international investors, with a diverse mix of nationalities participating in the market. Lyons pointed out that while Western European countries remain significant, there is a noticeable increase in interest from Eastern Europe, highlighting Dubai’s expanding global appeal.

The off-plan market saw 7,008 completed units in Q1 2025, marking a 15 percent decrease from the same period last year. As the market evolves, the report suggests that the current moderation might ultimately foster more sustainable long-term growth for Dubai’s property sector.