Dubai’s residential real estate market is showing signs of maturity and recalibration, with Q3 2025 data revealing a shift from rapid expansion to more selective, segment-driven growth, data showed on Tuesday.

According to the latest Dubai property market report from Betterhomes, the city recorded 55,280 property transactions worth Dh139.7 billion, marking an 18 per cent year-on-year increase in both volume and value.

But beneath the headline numbers lies a more nuanced story. “The Q3 numbers paint a picture of a market in selective ascent rather than straight-line growth,” “Demand is clearly tilting toward new supply, especially in the apartment segment, which saw a striking 28 per cent increase in deals year on year.”

Apartments were the clear outperformers in Q3, with off-plan apartment sales surging 35 per cent quarter-on-quarter, the highest jump ever recorded. Studios and one- to two-bedroom units accounted for 80 per cent of apartment transactions, driven by investor appetite for liquidity and rental returns. The total value of apartment sales hit Dh93 billion, with off-plan deals making up 81 per cent of that figure — a historic high.

In contrast, the villa and townhouse segment saw a decline. Villa sales dropped 22 per cent year on year, and off-plan villa transactions fell 69 per cent, reflecting a pause after record-breaking activity in the first half of the year. Harding noted, “Villas, particularly off-plan villas, are under pressure and may require more calibration between pricing, design, and buyer expectations.”

Dubai’s rental market remained robust, with leasing transactions nearly doubling year on year (+92 per cent). Apartments led the way with a 42 per cent quarter on quarter increase, while townhouses rose 36 per cent. The average annual rent stood at Dh196,000, with apartments averaging Dh145,000. Even as average rents stabilised, robust tenant activity and rising leads signal continued confidence in Dubai’s rental sector.

Investor activity continued to dominate, accounting for 63 per cent of all purchases, up from 58 per cent in Q2. Mortgage-backed transactions eased slightly to 51 per cent, reflecting a balanced buyer mix. Christopher Cina, Director of Sales, commented, “Q3 2025 shows the strength and depth of Dubai’s property market. Even as values eased 6 per cent from Q2 highs, volumes surged 11 per cent, highlighting how the market is expanding across price points and buyer profiles.”

The average price per square foot reached Dh1,664, nearly double the 2020 level. Over 28,500 units were delivered in 2025 so far, with 250,000 more scheduled through 2027, underscoring Dubai’s long-term development momentum. Apartments made up 85 per cent of Q3 handovers, led by JVC, Business Bay, and Town Square.

As Q4 begins, the market is expected to continue its shift toward mid- to upper-mid products, particularly apartments. Prime property transactions eased, suggesting a moment of pause among luxury buyers. Harding concluded, “The id to upper-mid product, especially apartments, remains the focus of momentum. The narrative is less about runaway growth and more about realignment. Q4 will test whether these shifts stabilise, deepen, or reverse.”

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Source: Khaleej Times 

22nd October, 2025