Dubai’s residential real estate market started the year on a strong note amid sustained demand by a growing population and heightened investor interest. According to the Savills Q1 2025 Dubai report, the first quarter of the year recorded a robust 23 percent annual increase in transaction volumes, underscoring the emirate’s ability to hit a sweet spot between investment potential and quality of life.
“In Q1 2025, off-plan sales continued as the cornerstone of transaction activity, representing 69 percent of all deals,” stated Rachael Kennerley, director of research at Savills.
Kennerley added that the residential real estate market witnessed robust supply, with more than 30,000 units launched during the quarter, most of which were apartments. “This figure is more than double the volume recorded in the same period last year, as developers capitalized on strong market demand,” she added.
Apartments dominate sales activity
Dubai’s ready market, comprising real estate transactions in completed and handed-over projects, made up the remaining 31 percent of transactions, said the report. Apartment sales accounted for the majority of transactions at 81 percent in this segment, reflecting its dominance in Dubai’s housing stock.
Looking at the market overall, apartments dominated sales activity, accounting for 76 percent of all transactions. However, the villa and townhouse segment witnessed a notable resurgence, with transactions rising from 18 percent in the previous quarter to 24 percent in Q1 2025.
Prominent micro-markets located along the Al Khail corridor, including Jumeirah Village Circle (JVC), Dubailand, Damac Hills 2, The Valley and Damac Lagoons, accounted for 55 percent of total transaction volumes and 56 percent of all newly launched residential units. The report added that land saturation and limited affordability in the city’s core residential locations have pushed development toward peripheral areas.
Prime residential market sees major uptick
Dubai’s prime residential real estate market also continued to perform well, underpinned by the city’s sustained appeal for HNWIs. Demand was driven by the strong quality of life proposition, a low tax environment, easy business set-up costs, and the strength of the Golden Visa program.
Over 1,300 units were transacted at values exceeding the AED10 million mark in Q1 2025, marking a 31 percent annual increase. Contrary to the wider market, villas dominated prime transactions with 73 percent of market share, recording a 52 percent annual rise and a 4 percent quarterly uptick.
“Demand across the prime residential segment in Dubai has not simply sustained but strengthened. Amid tariff wars, geopolitical uncertainties and unpredictable tax environments, the world’s wealthy increasingly recognize Dubai’s appeal, and developers are rising to the occasion. Villas in coveted locations, space and privacy are the preferred choice, but supply remains restricted for the time being,” stated Andrew Cummings, head of residential agency.
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Outlook remains optimistic amid global challenges
Looking ahead, the outlook for Dubai’s residential real estate sector remains optimistic. The report anticipates that amid global macroeconomic and political uncertainties, the emirate’s political stability, competitive regulatory landscape and business friendly ecosystem are expected to support ongoing population and investment inflows.
The development pipeline is, however, significant and necessitates a balanced approach to supply and demand.
