Dubai’s residential real estate market continues its strong growth trajectory, with villa prices nearly tripling since the pandemic. While momentum remains solid, recent data indicates that the market is gradually entering a more mature phase as capital gains ease, rental prices stabilise, and ready home transactions slow down.
Strong Price Growth, Slowing Momentum
The residential price index for Dubai rose 21.3% year-on-year in Q3 2025, compared to 23.9% in Q2 and 28.9% in Q3 2024. On a quarterly basis, prices increased 4.4% to reach 230.6 points, benchmarked to a base of 100 in Q1 2021.
Villas continued to outperform apartments, with their index reaching 307.5 points, up 26.4% annually and 5.5% quarterly. Apartment values climbed 16.1% year-on-year and 3.3% quarter-on-quarter, reaching 180.4 points.
Among the top-performing communities, Jumeirah Islands and Palm Jumeirah recorded villa price growth of 7.8% in the quarter.
Record Surge in Off-Plan Sales
The off-plan property segment recorded its highest activity level to date in Q3 2025, with 44,890 transactions, up 25.6% from Q2 and 36.2% year-on-year. Off-plan sales represented 77% of all residential transactions, reaching a total investment value of AED 108 billion and an average price of AED 2.3 million per unit.
This growth highlights investors’ increasing preference for flexible payment plans and long-term capital appreciation across Dubai’s emerging communities.
Rental Market Stabilizes
Rental prices have begun to stabilise after several quarters of rapid increases. The rental index rose 4.7% annually but remained unchanged quarter-on-quarter at 201.6 points.
Average villa rents reached AED 429,500 per year, while apartment rents averaged AED 96,300, reflecting a steady annual rise of 3.5% and 5.6% respectively.
Villa rents appear to be approaching affordability ceilings, while apartment rents continue to gain traction as tenants shift toward more practical housing options across the city.
Robust Supply Pipeline
So far in 2025, approximately 24,000 new homes have been delivered, with the total expected to surpass 27,000 units by year-end. The upcoming pipeline remains strong, with 158,854 apartments and 40,173 villas currently under construction and scheduled for completion by 2029.
The consistent pace of project deliveries is helping balance growing demand from both end-users and international investors.
Prime Market Outperforms
The prime property segment, defined as homes priced above AED 2,000 per sq ft, saw prices rise 22.4% year-on-year and 4.6% quarter-on-quarter.
Prime villa values reached 321.6 points, up 29.2% annually, while prime apartment values climbed 16.2% to 193.6 points.
High-end areas such as Palm Jumeirah, Emirates Hills, and Jumeirah Islands have witnessed villa values multiply up to four times since 2021, reaffirming Dubai’s status as one of the world’s most attractive luxury property markets.
Market Outlook
Dubai’s real estate market is showing signs of maturity after years of rapid expansion. While growth in capital values is moderating, fundamentals remain strong, supported by limited villa supply, a growing population exceeding 4 million, and projected economic growth of 4.9% in 2025.
Affordability challenges in the villa segment may influence future demand, but continued investor confidence and solid infrastructure development are expected to sustain long-term market stability.
