Dubai's residential real estate market showcases significant resilience, continuing to grow in terms of sales volumes and values, positioning the emirate as a prominent destination for global property investment.

A report from consultancy Cavendish Maxwell predicts that 73,000 new homes will be delivered by 2025, contributing to an overall target of 300,000 housing units by the end of 2028, marking one of the most extensive residential expansions in Dubai's history.

In the first quarter of 2025, Dubai recorded 42,000 property sales transactions amounting to Dh114.4 billion.

This figure reflects a 10 percent decline from the previous quarter, yet represents a notable 23 percent increase compared to the same period last year.

Ronan Arthur, Director and Head of Residential Valuation at Cavendish Maxwell, noted that although the start of 2025 saw softer price trends, the market is stabilizing, with an average quarterly price increase of 2.8 percent, a decrease from the 4 percent average observed during 2023 and 2024.

During the first quarter of 2025, nearly 95 new projects were launched, bringing an additional 29,000 residential units to market.

Of these, about 9,300 units were completed, marking the second-highest quarterly completion figure in two years.

Apartments dominated the completions, comprising approximately 80 percent, while villas and townhouses constituted the remainder.

Jumeirah Village Circle (JVC) emerged as the leading area for both completions and transactions, with 4,330 units added and 3,330 apartment sales recorded.

Off-plan sales played a pivotal role in the market, generating Dh77.5 billion from 29,000 transactions, which accounted for roughly 70 percent of all sales, showcasing a 32 percent year-on-year increase.

The secondary market also displayed strength, with 13,200 transactions, reflecting a 6.6 percent annual rise.

The composition of sales indicated a strong preference for apartments, which represented 75 percent of total deals, although there is an increasing demand for larger homes, with townhouses and villas making up 17 percent and 7 percent of sales, respectively.

The luxury segment experienced a considerable uptick, with 590 properties sold at prices exceeding Dh20 million, an increase from 480 during the same period the previous year.

Notably, 67 percent of these high-value sales were off-plan, suggestive of strong demand from affluent investors for new developments.

By March 2025, the average property price reached Dh1,535 per square foot, marking a year-on-year increase of 16 percent.

Rental growth dynamics appear to show signs of moderation, with annual rent growth recorded at 14.4 percent and a mere 1 percent increase on a quarterly basis.

This deceleration may be attributed to the increasing availability of new units and the implementation of the Dubai Smart Rental Index, designed to introduce more transparency and structure to rental pricing.

Average rental yields remain appealing, reported at 7.3 percent for apartments and 5 percent for villas and townhouses; certain areas, including Dubai Investments Park and International City, have even reported yields as high as 10.3 percent for apartments.

Market activity surged in May 2025, with property sales reaching Dh66.8 billion, an increase of 49.9 percent compared to May 2024. This month saw 18,693 transactions, establishing it as the second-highest month on record for volume, a stark contrast to May 2020, which recorded only Dh2.3 billion from 1,400 deals.

The uptick reinforces Dubai's position as a global investment hub, buoyed by economic stability and ongoing interest from high-net-worth individuals.

Despite some analysts raising concerns about a potential 15 percent correction in property prices, industry leaders have expressed confidence in the market's trajectory.

Firas Al Msaddi, CEO of fäm Properties, highlighted that the market is not on the verge of a downturn but is transitioning into a phase of more measured growth.

Current projections indicate over 360,000 residential units in the pipeline over the next five years, with only a limited number nearing completion, suggesting that demand is likely to absorb incoming supply effectively.

In related developments, Dubai Land Department's (DLD) second tokenized real estate project, a one-bedroom apartment in Kensington Waters, sold out in just one minute and 58 seconds, marking a global record for the speed of blockchain-backed property investment sales.

This offering attracted 149 investors from 35 nationalities and generated a waitlist of more than 10,700 potential buyers.

The initial property is part of a broader Property Tokenization Initiative endorsed by the DLD, aimed at increasing market accessibility through blockchain-enabled fractional ownership.

The first tokenized property, launched on May 25, 2025, involved a two-bedroom apartment in Business Bay, valued at Dh2.4 million and generating substantial interest among investors, also indicating a trend towards digital property investments and fractional ownership models.

The regulatory framework governing the tokenization platform has been crafted in collaboration with the Virtual Assets Regulatory Authority, alongside other key regulatory bodies, further assuring investors of the legitimacy and security of these modern investment offerings.