Dubai's real estate market is experiencing notable growth, driven by evolving preferences among both investors and tenants.

Recent data reveals that in February, the market recorded a 35% annual increase in transactions, totaling 16,099 deals.

In conjunction with this surge, the total market value rose by 55%, reaching AED 51.1 billion.

In the apartment segment, demand is strongly concentrated in smaller units, with 71% of buyers expressing interest in one and two-bedroom apartments.

Specifically, 34% are seeking one-bedroom configurations, while 37% are focused on two-bedroom options.

The interest in studio apartments remains stable at 13%.

Prime locations such as Dubai Marina, Downtown Dubai, and Palm Jumeirah are leading the search trends, as buyers prioritize luxury accommodations with good connectivity.

On the villa side, a clear preference for larger living spaces is evident, with 86% of villa seekers interested in three-bedroom (39%) or four-bedroom-plus properties (47%).

The growing demand reflects a shift towards family-oriented living.

Areas like Dubai Hills Estate, Damac Hills 2, and Al Furjan are gaining traction due to their community amenities and relative affordability.

The rental market is also undergoing significant changes.

A considerable 64% of renters now prefer furnished apartments, a marked increase from 45% earlier in 2024, primarily driven by expatriates seeking convenience.

Renting trends indicate that 56% are concentrated on studios (20%) or one-bedroom apartments (36%), suggesting a focus on budget-friendly options.

Key rental hotspots are identified as Jumeirah Village Circle (JVC), Deira, and Business Bay, while, in the villa rental market, unfurnished options still account for 58% of transactions.

However, demand for furnished villas has risen sharply to 42%, up from 36% the previous year.

Space remains a priority among renters, with 80% seeking three-bedroom (41%) or larger villas, particularly in popular areas like Jumeirah, Dubai Hills Estate, and Al Furjan.

The report also highlights a burgeoning off-plan market, with transaction values climbing 57% year-on-year to AED 20.5 billion.

Key growth areas, Wadi Al Safa 5 and Al Yufrah 1, recorded significant sales of AED 2.2 billion and AED 1.4 billion, respectively.

Meanwhile, existing property transactions have seen resilience, increasing by 27% to 6,997, with high-profile properties such as the Burj Khalifa contributing to this uptick.

Cherif Sleiman, Chief Revenue Officer at Property Finder, noted the maturation of Dubai’s real estate market, attributing inventory strategies to shifting investor and tenant preferences.

He stated that the rise in furnished apartments and off-plan investments reflects Dubai's attractiveness to global talent and entrepreneurs.

Sleiman also pointed to regulatory initiatives aimed at facilitating business operations in the emirate, which are further boosting market momentum.

Real estate experts emphasize that this evolving landscape has significant implications for investment strategies.

Investors are seeking a balance between high-yield opportunities in compact, affordable apartment segments and luxury villa developments in emerging suburbs.

Tenants are increasingly favoring flexibility, with furnished rentals reducing relocation costs for transient workers.

The report indicates that developers and landlords are urged to adapt to this polarized demand by focusing on the production of compact, ready-to-move-in apartments alongside spacious, customizable villas.