Authored by the expert who managed and guided the team behind the UAE Property Pack
Yes, the analysis of Dubai's property market is included in our pack
Dubai's residential property market has experienced remarkable growth over the past three years, with prices surging 60% from 2022 to early 2025. As we reach mid-2025, the market stands at a critical juncture after its first month-on-month price decline in over two years in January 2025, dropping by 0.57%.
This comprehensive analysis examines whether Dubai property prices are still rising, using the latest market data and expert forecasts to help potential buyers and investors make informed decisions.
If you want to go deeper, you can check our pack of documents related to the real estate market in the UAE, based on reliable facts and data, not opinions or rumors.
Dubai property prices have reached 20% above their 2014 peak but are now facing a turning point with Fitch Ratings projecting a 15% correction through 2026.
The combination of 250,000 new units by 2026 and population growth of only 5% annually creates a significant oversupply risk that will likely push prices down.
| Indicator | Current Status | Trend Direction |
|---|---|---|
| Average Price per Sq Ft | AED 1,535-1,563 (USD 418-425) | Stabilizing |
| Prime Area Price per Sq Ft | AED 1,750+ (USD 476+) | Mild growth |
| Q1 2025 Price Change | +2.8% quarter-on-quarter | Slowing growth |
| Annual Price Growth (2024) | +19-30% depending on property type | High growth |
| Projected 2025-2026 Trend | -15% correction expected by Fitch | Declining |
| New Supply (2025-2027) | +16% increase (250,000 units) | Oversupply risk |
| Population Growth | +5% annually | Below supply growth |
| Rental Yields | 7.3% (apartments), 5% (villas) | Attractive but declining |
| Mortgage Rates | Recently cut by 0.5% | Improving affordability |
| Off-Plan Payment Terms | Shifting to 50% during construction | More buyer-friendly |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Fact-checked and reviewed by our local expert
Jean-Charles Salvin 🇫🇷
Co-Founder, Best Dubai Condos
What are the current property prices per square foot in Dubai as of June 2025?
As of June 2025, the average price per square foot for residential properties in Dubai ranges from AED 1,535 to AED 1,563 (approximately USD 418-425).
Prime areas command substantially higher rates, with luxury zones like Palm Jumeirah and Downtown Dubai averaging AED 1,750 per square foot or more. The Dubai residential market has reached price levels that are now 20% above the previous 2014 peak, with villas in prime areas trading at prices up to 60% higher than their 2014 levels.
This represents a significant appreciation from just three years ago when the current growth cycle began. Different neighborhoods show varying price levels based on their location, amenities, and target market segments.
It's something we develop in our UAE property pack.
How much have Dubai property prices increased in the first half of 2025?
Dubai property prices showed mixed performance in the first half of 2025, with the market experiencing its first monthly decline in over two years.
After a 0.57% drop in January 2025, the market recovered with a 2.8% quarter-on-quarter increase in Q1 2025. As we progress through Q2 2025, most analysts observe a stabilization phase with price growth moderating to an annualized rate of 5-7% in established areas.
| Period | Price Change | Market Condition |
|---|---|---|
| January 2025 | -0.57% (monthly) | First decline in 2+ years |
| Q1 2025 | +2.8% (quarterly) | Recovery phase |
| 2024 Annual | +19-30% | Strong growth |
| Q2 2025 Annualized | +5-7% | Stabilization |
This marks a significant deceleration from the robust double-digit growth rates seen throughout 2024. The slowdown signals that Dubai's property market is entering a more mature phase after three years of exceptional growth.
Which Dubai neighborhoods saw the biggest price increases in early 2025?
Prime residential areas demonstrated the strongest price performance in early 2025, with some luxury communities posting gains exceeding 40% year-on-year.
Palm Jumeirah led the charge with a 25.2% annual increase, while ultra-luxury communities like Emirates Hills and Jumeirah Islands saw gains above 40%. Downtown Dubai and Dubai Marina recorded more moderate but still healthy annualized growth of 7-10%.
In contrast, affordable and mid-market areas showed modest gains. Jumeirah Village Circle (JVC) recorded AED 1,443 per square foot with only a 1.16% increase in Q1 2025, while Dubai South maintained steady 4-6% annual growth.
The divergence between prime and affordable areas reflects different buyer profiles, with high-net-worth individuals continuing to drive demand in luxury segments while price-sensitive buyers in mid-market areas become more cautious.
What is Fitch Ratings' forecast for Dubai property prices through 2026?
Fitch Ratings projects a moderate correction in Dubai's residential property market starting in the second half of 2025 and continuing through 2026.
The credit rating agency expects property prices to fall by up to 15% from their current peak levels. This forecast is based on a significant supply-demand imbalance emerging in the market, with approximately 120,000 residential units scheduled for handover in 2026 alone.
The massive supply pipeline of 250,000 units between 2023 and 2026 represents a 16% increase in Dubai's total housing stock, while population growth is projected at only 5% annually. This mismatch is expected to place substantial downward pressure on both sale prices and rental yields.
Market experts identify this oversupply as the primary risk factor that could trigger the anticipated price correction in late 2025 and 2026, particularly affecting non-prime segments of the market.
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How many new properties will be delivered in Dubai in 2025 and 2026?
Dubai's residential market faces an unprecedented supply wave with approximately 73,000 homes scheduled for delivery in 2025, followed by 120,000 units in 2026.
This massive influx forms part of a record pipeline totaling 250,000 units between 2023 and 2026, representing a 16% increase in Dubai's total residential stock. The supply growth rate significantly outpaces the projected 5% annual population growth, creating a substantial supply-demand gap.
| Year | Units to be Delivered | Impact on Market |
|---|---|---|
| 2025 | 73,000 units | Initial pressure on prices |
| 2026 | 120,000 units | Peak supply impact |
| Total Pipeline (2023-2026) | 250,000 units | 16% stock increase |
| Population Growth Rate | 5% annually | Demand lagging supply |
Market experts identify this oversupply as the primary risk factor that could trigger the anticipated price correction in late 2025 and 2026.
What are the current mortgage rates and lending conditions in Dubai as of mid-2025?
Dubai's mortgage market has become more favorable for buyers following a 0.5% interest rate cut in Q3 2024.
As of June 2025, the improved lending conditions have led to a notable shift in market dynamics, with more buyers opting for mortgage financing rather than cash purchases. The combination of lower interest rates has particularly benefited first-time buyers and residents looking to transition from renting to owning.
Current lending conditions show increased mortgage-based purchases versus cash deals, growing numbers of residents transitioning from renting to owning, and particularly strong mortgage demand in affordable and mid-market segments.
The improved lending environment has partially offset the impact of high property prices, enabling more end-users to enter the market, especially among Dubai residents looking to escape rising rents.
Which property types are performing better in 2025 - villas or apartments?
Villas significantly outperformed apartments throughout 2024 and early 2025, but the market dynamics are shifting as both segments enter a stabilization phase.
In 2024, villas recorded annual price increases of 20-30% compared to apartments' 19-21% growth, with top villa communities like Jumeirah Islands and Palm Jumeirah seeing exceptional gains exceeding 40% annually. However, by June 2025, both segments are moderating their growth trajectories.
Notably, apartment rent growth has begun outpacing villa rent growth as villa prices approach affordability limits for many buyers. This shift suggests that the exceptional outperformance of villas may be coming to an end as the overall market matures.
It's something we develop in our UAE property pack.
What are the latest rental yields for Dubai properties in Q2 2025?
Dubai continues to offer attractive rental yields compared to global standards, with apartments averaging 7.3% and villas at 5.0% as of Q1 2025.
The rental market experienced strong growth in 2024 with rents rising 14-19%, actually outpacing sales price growth in several segments. This robust rental growth has pushed more tenants to consider purchasing properties, especially as mortgage conditions have improved.
However, the rental market is showing signs of peaking as new supply enters the market. The pace of rental growth is slowing, suggesting that yields may compress further throughout 2025 and 2026 as the projected 250,000 new units are delivered.
Despite the compression, Dubai's rental yields remain competitive internationally, particularly for apartments which continue to attract investors seeking regular income streams.
We made this infographic to show you how property prices in the UAE compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
How have developer payment plans changed in 2025 to attract buyers?
Developers in Dubai have significantly adjusted their payment strategies in 2025, moving from 70% construction payment plans to more buyer-friendly 50% models.
This shift reflects developers' recognition of changing market conditions and the need to attract buyers in an increasingly competitive environment. Key changes include reduced construction phase payments, extended post-handover payment periods, lower down payment requirements, and more flexible installment schedules.
Special incentives for cash buyers have also become more common as developers work harder to move inventory. While these easier payment terms support short-term demand, they also signal that the market is approaching oversupply conditions.
The adjustment in payment plans particularly benefits end-users and first-time buyers who previously struggled with the higher upfront payment requirements.
What impact will Dubai's population growth have on property prices in 2025-2026?
Dubai's population growth of 5% annually is significantly outpaced by the 16% increase in housing stock projected through 2027, creating a substantial oversupply risk.
The city is expected to reach 4 million residents in 2025, representing healthy demographic growth. However, with 250,000 new residential units entering the market by 2026, the supply surplus of 11 percentage points poses a significant challenge to price stability.
This mismatch between population growth and housing supply is the primary factor behind Fitch Ratings' projection of a 15% price correction. The oversupply is expected to impact different market segments differently.
Affordable and mid-market areas like Jumeirah Village Circle and Dubai South face the greatest pressure, while prime locations may prove more resilient due to their limited new supply and affluent buyer base.
How does Dubai's current property market compare to the 2014 peak?
Dubai's residential property prices have substantially surpassed their previous 2014 peak, with current average prices standing 20% above those historical highs.
The outperformance varies significantly by property type and location. Prime villas show the strongest gains at up to 60% above 2014 levels, while general villas are 30-40% higher. Apartments have increased by 15-25% above their 2014 peak, depending on location.
| Property Type | Current vs 2014 Peak | Notable Details |
|---|---|---|
| Overall Market | +20% above 2014 | After 60% growth from 2022 |
| Prime Villas | Up to +60% above 2014 | Strongest outperformance |
| General Villas | +30-40% above 2014 | Broad-based gains |
| Apartments | +15-25% above 2014 | Location dependent |
Unlike the 2014 boom which was followed by a severe multi-year correction, the current market benefits from stronger fundamentals including improved regulations and a more diversified buyer base.
Which areas of Dubai face the highest risk of price declines in late 2025?
Areas with high new supply pipelines and price-sensitive buyer demographics face the greatest risk of price corrections in late 2025.
High-risk areas include Jumeirah Village Circle (JVC), Dubai South, Dubai Sports City, International City, and Dubai Investment Park. These locations share characteristics of significant new inventory, distance from prime districts, and buyers who are more sensitive to price changes.
In contrast, prime areas like Palm Jumeirah, Downtown Dubai, Emirates Hills, Dubai Marina, and Business Bay are expected to show more resilience. These locations benefit from limited new supply, wealthy buyer bases, and established infrastructure.
It's something we develop in our UAE property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Dubai's residential property market has reached a turning point in mid-2025. After three years of exceptional growth that pushed prices 20% above their previous 2014 peak, the market is now facing significant headwinds.
The combination of record supply (250,000 units by 2026), moderating demand, and a supply growth rate that's triple the population growth rate points to an inevitable correction. Fitch Ratings' forecast of a 15% price decline through 2026 appears well-founded based on these fundamentals. While prime areas may show resilience, the broader Dubai residential market is entering a downward phase after reaching its cyclical peak.