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 property market is experiencing remarkable momentum as of September 2025, with residential prices climbing across all segments and rental yields maintaining attractive levels.
The emirate continues to attract record investment volumes, driven by robust economic growth, visa reforms, and a growing population that reached nearly 4 million residents. International buyers dominate the market, contributing to over AED 400 billion in transactions during the first half of 2025 alone.
If you want to go deeper, you can check our pack of documents related to the real estate market in Dubai, based on reliable facts and data, not opinions or rumors.
Dubai's residential market posted exceptional growth in 2025, with villa prices up 29% year-on-year and apartment prices rising 20%, while maintaining rental yields between 6-10% across prime areas.
The market faces a significant supply influx with approximately 73,000 new units expected in the remainder of 2025 and up to 300,000 units projected by 2028, which may moderate future price growth.
| Market Segment | Current Performance | 2025-2027 Outlook |
|---|---|---|
| Villa Prices | +29% year-on-year growth | Continued appreciation, moderation expected |
| Apartment Prices | +20% year-on-year growth | 5-8% annual growth forecast |
| Rental Yields | 6-10% across prime areas | Stable at 6-8% average |
| Transaction Volume | AED 400+ billion (H1 2025) | Continued high activity expected |
| New Supply | 73,000 units (remainder 2025) | 120,000 units in 2026 alone |
| International Buyers | 58% of transactions | Sustained high participation |
| Population Growth | 5% annually to 3.9M+ | Continued expansion to 4M+ |
Fact-checked and reviewed by our local expert
Jean-Charles Salvin 🇫🇷
Co-Founder, Best Dubai Condos
How are residential property prices in Dubai trending across different segments like apartments, villas, and townhouses right now?
Residential property prices in Dubai are showing strong upward momentum across all segments as of September 2025.
Villas have posted the most dramatic gains, with prices surging 29% year-on-year according to the latest ValuStrat data. Prime villa communities like Palm Jumeirah saw increases of 40%, while Jumeirah Islands recorded 41% growth. Emirates Hills and The Meadows both achieved 27% appreciation, reflecting strong demand from high-net-worth individuals and families.
Apartments have demonstrated steady appreciation with 20% annual growth, driven by both end-user demand and investor activity. The strongest performers include The Greens with 24% growth, Dubai Silicon Oasis at 23%, and various Dubailand residential communities. Larger units catering to families have particularly outperformed, as buyers seek more space and lifestyle-oriented properties.
Townhouses and affordable community homes have gained significant traction, reflecting shifting buyer preferences toward newer and lifestyle-focused developments. This segment has benefited from government initiatives promoting family-friendly housing and the growing expatriate population seeking community-style living.
Overall average prices now stand at AED 1,625 per square foot as of July 2025, representing a 31.7% premium over the previous 2014 peak.
What's the current rental yield across prime areas in Dubai and how does it compare to last year?
Current rental yields in Dubai's prime areas remain exceptionally attractive, with most locations delivering between 6-10% gross returns as of September 2025.
Downtown Dubai delivers solid rental yields of 7-9%, with studios commanding over 8% returns due to high demand from tourists and professionals attracted to the area's central location near Burj Khalifa and Dubai Mall. The area's premium positioning maintains consistent occupancy rates throughout the year.
Dubai Marina achieves balanced yields of approximately 6.5% for one- and two-bedroom apartments, with studios reaching 6.5%. Despite higher purchase prices averaging over $1.2 million, the waterfront location and entertainment options ensure strong rental demand from expatriate professionals and international visitors.
Business Bay offers yields ranging from 6.68% to 5.08% across different unit types, benefiting from proximity to Downtown Dubai and DIFC. Palm Jumeirah generates yields around 6% for premium properties, while Jumeirah Village Circle (JVC) delivers excellent returns across all property types with most units generating over 7% yields.
Compared to 2024, these yields have remained consistent or slightly improved, thanks to increased rental demand from Dubai's population growth and tourism recovery. It's something we develop in our Dubai property pack.
How much new housing supply is expected to come onto the Dubai market in the next 12 to 24 months?
Dubai faces a substantial influx of new housing supply over the next 24 months, with significant implications for market dynamics.
Approximately 73,000 residential units are expected for delivery over the remainder of 2025, followed by a peak of 120,000 units scheduled for completion in 2026. This represents a massive 16% average increase in supply during 2025-2027, significantly exceeding the forecast population growth of around 5% annually.
The supply pipeline extends further with nearly 300,000 total units projected to enter the market by 2028. Key submarkets leading this expansion include Jumeirah Village Circle with 27,082 units, Business Bay contributing 19,472 units, Azizi Venice adding 17,108 units, DAMAC Lagoons delivering 10,733 units, and Arjan providing 9,752 units.
This supply surge stems from the record number of property projects launched during 2023-2024, with approximately 250,000 units in the development pipeline. However, industry experts note that actual completions may be influenced by shifting market dynamics, evolving buyer preferences, and potential construction delays.
The concentration of new supply in 2026 has prompted analysts to forecast a potential market correction, with Fitch Ratings projecting that this substantial increase could outpace population growth and impact pricing dynamics across various segments.
What are the current average days on market for properties in key neighborhoods like Downtown, Dubai Marina, and Palm Jumeirah?
Properties in Dubai's prime neighborhoods are experiencing reduced time on market, reflecting strong buyer demand and market liquidity as of September 2025.
The average time-on-market across Dubai has decreased to approximately 34 days, indicating tight inventory and active buyer interest. This represents a significant improvement in market velocity compared to previous years, demonstrating robust demand despite rising prices.
Downtown Dubai properties typically sell within 25-35 days due to the area's prestigious location and consistent demand from both end-users and investors. The presence of iconic landmarks like Burj Khalifa and Dubai Mall ensures continuous interest from international buyers seeking trophy assets.
Dubai Marina properties average 30-40 days on market, with smaller units like studios and one-bedroom apartments moving faster due to their appeal to young professionals and short-term rental investors. Larger units may take slightly longer but still perform well given the waterfront location's desirability.
Palm Jumeirah luxury properties can vary significantly, with some premium villas selling within 20-30 days while others may take 45-60 days depending on price positioning and specific location within the palm fronds. The ultra-luxury segment requires more targeted marketing to specific buyer profiles.
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How have transaction volumes shifted month-on-month and year-on-year in Dubai's property market?
Transaction volumes in Dubai's property market have reached historic levels, demonstrating exceptional growth momentum throughout 2025.
Monthly transaction activity peaked at over 20,116 deals in July 2025, representing a 21.3% month-on-month surge and continuing 2025's record-breaking streak. May 2025 set a previous record with 18,700 transactions worth AED 66.8 billion, marking a 44% year-over-year increase in transaction value and 6% growth in volume.
Year-on-year performance shows remarkable strength, with the first half of 2025 recording 94,000 residential sales transactions—a 23.04% increase compared to the same period in 2024. Total transaction value reached AED 262.7 billion (USD 71.5 billion), marking a 37.68% increase over the previous year.
The market composition reveals apartments accounting for 78% of transaction volume and 55% of total value, while off-plan properties maintain dominance with approximately 60% of all sales. Primary ready sales quadrupled compared to May 2024, reaching AED 17.9 billion with a 314% increase in value across 2,400 transactions.
Despite some monthly fluctuations, with June experiencing an 11.3% month-on-month decline to 16,584 transactions, the overall trend remains strongly positive with each month setting new records for the respective periods.
What role are international buyers playing in Dubai right now and which nationalities are most active?
International buyers dominate Dubai's property market, accounting for over 58% of all transactions in Q2 2025 and driving market momentum across both luxury and mid-market segments.
| Nationality | Market Share 2025 | Key Investment Focus |
|---|---|---|
| Indian | 22% | Affordable apartments, JVC, Business Bay |
| British | 17% | High-yield rentals, Marina, Downtown |
| Chinese | 14% | Luxury properties, Golden Visa investments |
| Saudi | 11% | Premium locations, Palm Jumeirah, Downtown |
| Russian | 9% | Luxury real estate, safe haven assets |
| Other Nationalities | 27% | Mixed segments and locations |
Indian buyers continue leading foreign investment with AED 18.1 billion across 7,353 transactions, attracted by the emirate's stable economy, tax-free policies, and long-term residency options. The depreciation of the Indian rupee against the US dollar makes Dubai's dollar-pegged market particularly appealing for wealth preservation.
British investors have increased their presence to 17%, up from 16% in 2024, viewing Dubai's high-yield property sector as an attractive alternative amid UK economic challenges including rising interest rates and inflation. Many focus specifically on rental income opportunities in both short-term and long-term markets.
Cash buyers remain dominant, contributing to 87% of all purchases according to Knight Frank estimates, with mortgaged sales comprising only 13% of transactions. This cash-heavy dynamic reflects the international buyer profile and their preference for direct ownership without financing complications.
How is the mortgage rate environment in the UAE impacting affordability and buyer demand in Dubai?
The UAE mortgage rate environment is significantly influencing buyer behavior and market accessibility as of September 2025.
Current mortgage rates range between 4.14-5.75%, with the Central Bank of UAE base rate at 4.40% following US Federal Reserve policy. Non-resident buyers face higher rates of 4.99-5.49% compared to 3.99% for residents, along with increased down payment requirements of 25-40% versus standard 20% for residents.
Recent developments show mortgage transaction volumes surged to a record 4,891 loans in July 2025, representing a 9.2% month-on-month increase. Average loan amounts reached AED 1.8 million with loan-to-value ratios at 73.7%, slightly above June's 73.5% but below historical averages of 75-77%.
The elevated borrowing costs are creating a two-tier market effect. While discouraging some first-time buyers and delaying upgrades among existing homeowners, the record mortgage volumes suggest strong confidence among well-capitalized buyers. High rates are increasing rental market retention as potential buyers remain tenants longer.
Banks no longer finance Dubai Land Department fees (4%) and broker commissions (2%), increasing upfront cash requirements and further emphasizing the market's preference for cash transactions. It's something we develop in our Dubai property pack.
What government initiatives or regulatory changes are currently shaping Dubai's property market outlook?
Dubai's government has implemented comprehensive reforms that are fundamentally reshaping the property market landscape in 2025.
1. **Golden Visa Program Enhancement**: The updated Golden Visa allows 10-year renewable residency for property investments of AED 2 million or more, with relaxed conditions including acceptance of mortgaged properties and off-plan purchases. Additionally, 2-year and 5-year visa options are available for investments starting at AED 750,000.2. **100% Foreign Ownership**: Federal decree-law now allows foreigners complete ownership of properties and onshore companies in designated freehold areas, removing local sponsor requirements and expanding accessibility to international buyers.3. **Digital Transformation**: The Dubai Land Department's 2025 regulation overhaul has digitized title registrations, introduced robust escrow account requirements, and streamlined property transactions. The new Smart Rental Index uses AI and real-time data for transparent rental valuations.4. **Green Visa Program**: The 5-year self-sponsored Green Visa targets skilled workers, freelancers, and investors, allowing UAE residence without local employer sponsorship, further expanding the potential buyer pool.5. **Anti-Money Laundering Measures**: New reporting requirements for cash transactions above AED 55,000 and virtual currency payments enhance market transparency and investor confidence.These initiatives have collectively created an investor-friendly environment that's attracting global capital and supporting sustained market growth while ensuring regulatory compliance and transparency.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UAE versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How are luxury properties performing compared to mid-market and affordable housing segments in Dubai?
Luxury properties continue outperforming other segments in Dubai's market, though all categories are experiencing growth as of September 2025.
The luxury segment (transactions above AED 10 million) maintains exceptional momentum, with 948 luxury property sales in 2024 and prices expected to rise 8-10% annually in 2025. Ultra-luxury areas like Emirates Hills, Palm Jumeirah, and Downtown Dubai command premium pricing with properties ranging AED 5,000-7,000 per square foot.
Villas in luxury communities have appreciated 66% above their 2014 peak and 175% higher than post-pandemic levels, driven by the steep growth of high-net-worth individuals residing in Dubai. Branded residences connected to luxury hospitality operators have shown exceptional performance, though generic luxury apartments may face pressure from new supply.
Mid-market segments are experiencing solid growth with apartment prices up 12-24% year-on-year, particularly in established communities like Business Bay, JVC, and Dubai Silicon Oasis. These areas offer strong rental yields of 6-8% while maintaining more accessible pricing for middle-income buyers.
Affordable housing segments in areas like Dubai South, Arjan, and International City are attracting increased attention from first-time buyers and yield-focused investors. These locations provide rental yields reaching 7-9% with lower entry costs, making them attractive for investors seeking higher percentage returns on smaller capital outlays.
What's the outlook for rental demand given Dubai's population growth, job creation, and visa reforms?
Rental demand in Dubai is expected to remain exceptionally strong through 2025-2027, supported by multiple demographic and policy drivers.
Population growth continues at approximately 5% annually, with Dubai's population reaching 3.915 million in Q1 2025 and growing by over 50,000 residents quarterly. The city is adding nearly 1,000 new residents daily according to recent Property Finder data—double last year's daily arrivals—creating sustained housing demand pressure.
Job creation across Dubai's diversified economy is supporting rental demand, particularly in finance, tourism, technology, and logistics sectors. The UAE's GDP growth is forecasted at 4.0% in 2025 and 5.0% in 2026, with non-hydrocarbon sectors driving employment expansion and attracting skilled professionals.
Visa reforms are significantly boosting rental demand sustainability. The Golden Visa program encourages long-term residence commitment, while Green Visa options for skilled workers and entrepreneurs expand the potential tenant base. These reforms are converting many temporary residents into longer-term renters or buyers.
Tourism sector growth adds additional pressure, with Dubai welcoming 18.7 million overnight visitors in 2024—a 9% increase from 2023. Hotel occupancy rates of 78% indicate strong tourism momentum, supporting both short-term and extended-stay rental demand.
High mortgage rates are also keeping potential buyers in the rental market longer, sustaining demand while elevated home prices create affordability challenges for first-time purchasers.
How is the short-term rental market, especially Airbnb-style lettings, influencing property investment returns in Dubai?
The short-term rental market is significantly enhancing property investment returns in Dubai, with Airbnb-style lettings delivering superior yields compared to traditional long-term rentals.
As of July 2025, Dubai hosts 26,569 active Airbnb listings generating an average annual revenue of AED 158,000 ($43,000) per property. The market maintains a healthy 71% median occupancy rate with average daily rates of AED 623 ($170), significantly outperforming many global destinations.
Short-term rentals can increase revenue by 20-40% compared to long-term leases according to Dubai property management companies. Best-performing properties in the top 10% achieve monthly revenues exceeding $8,211, while strong performers in the top 25% earn $5,139 or more through effective management and prime locations.
Prime tourist areas like Downtown Dubai, Dubai Marina, and Palm Jumeirah command premium short-term rental rates. Downtown properties can generate AED 80,000-300,000 annually, while Dubai Marina units earn AED 20,000-25,000 monthly during peak seasons compared to AED 12,000 monthly for traditional rentals.
The government's investor-friendly approach includes streamlined licensing through the Department of Economy and Tourism, with registration fees ranging AED 370-1,270 depending on property size. This regulatory support, combined with tax-free rental income, makes short-term rentals increasingly attractive for property investors seeking higher returns.
However, the market shows seasonality with December being the peak revenue month and July presenting the lowest earnings, requiring strategic pricing adjustments throughout the year. It's something we develop in our Dubai property pack.
What are analysts and major developers forecasting for Dubai's property prices and rental yields over the next 2 to 3 years?
Analysts and major developers present a cautiously optimistic outlook for Dubai's property market through 2025-2027, with expectations of continued growth at a more moderate pace.
| Forecasting Entity | Price Forecast 2025-2027 | Rental Yield Outlook |
|---|---|---|
| ValuStrat | +10% remainder of 2025, then moderation | Sustained at current levels |
| Fitch Ratings | Peak in 2025, up to 15% correction possible | Gradual decline from current highs |
| Deloitte | Continued growth with stabilization | 6.7% average maintained |
| DAMAC Properties | 5-8% annual price growth | 7% average rental yields |
| The Luxury Playbook | 3.5-5.2% annual growth through 2026 | 3-4.5% rental growth annually |
Most analysts agree that Dubai property prices will continue rising through 2025, with ValuStrat forecasting another 10% increase before year-end. However, growth is expected to moderate from current highs as the market matures and approaches a more balanced supply-demand dynamic.
Fitch Ratings anticipates a moderate correction beginning in the second half of 2025, with prices potentially declining up to 15% as new supply peaks in 2026. Despite this correction, they don't expect market destabilization due to strong underlying fundamentals including population growth and economic diversification.
Rental yields are projected to remain attractive at 6-8% average levels, with prime areas maintaining higher returns. The substantial new supply influx may create downward pressure on yields in certain submarkets, particularly where new completions exceed absorption capacity.
Major developers like DAMAC Properties forecast sustained investor interest with 5-8% annual price growth and 7% average rental yields, supported by Dubai's position as a global business hub and tourism destination. Long-term outlook through 2027 shows continued strength despite near-term adjustment expectations.
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 property market in September 2025 presents a dynamic landscape of opportunity and transformation, characterized by strong current performance alongside evolving future dynamics.
While price appreciation and rental yields remain attractive across all segments, the incoming supply surge requires careful market timing and location selection for optimal investment outcomes.
Sources
- Global Property Guide - UAE Property Market Analysis 2025
- Consultancy ME - Dubai Property Prices Continue Upward Trend
- DAMAC Properties - Dubai Real Estate Market Forecast 2025
- Deloitte - Dubai Real Estate Predictions Report 2025
- Wise - Top Rental Yields in Dubai 2025
- Property Monitor - Monthly Market Report January 2025
- Khaleej Times - Dubai Property Prices Analysis
- The Luxury Playbook - Dubai Real Estate Market Overview 2025
- Airbtics - Dubai Airbnb Revenue Data 2025
- Casa Bella - Top Foreign Investor Nationalities Dubai 2025