Monthly Market Report January 2025
Dubai Real Estate Sees First Price Drop in Over Two Years – Is the Market Changing?
Dubai’s property prices declined by 0.57% month-on-month (MoM) in January, bringing the average price to AED 1,484 per square foot. This marks the first price drop since the summer of 2022, when a similar decline of 0.58% was recorded in July. According to the Property Monitor Dynamic Price Index (DPI), current prices remain 20.3% above the previous peak seen in September 2014.
The ongoing market cycle has now stretched for 51 months, showing over four years of steady price increases. During this period, prices rose by an average of 1.19% per month. However, growth has been slowing in recent months. After peaking at 2.48% in August 2024, the rate of increase dropped to 0.48% in November and 0.88% in December before turning negative in January. This trend indicates that the market may be reaching a plateau, with affordability concerns affecting further price growth. While demand is still strong, buyers are becoming more price-sensitive, making it harder for prices to rise at the same pace as before.
-0.57%
Dynamic Price Index Monthly Change
AED 1,484/sq ft
Dynamic Price Index Current Property Price
14,413
Number of Monthly Transactions
AED 425M
Highest Recorded Sale
AED 175K
Lowest Recorded Sale
Total property sales in January fell by 4.6% compared to December, reaching 14,413 transactions. Despite the drop, this remains the highest number of sales ever recorded for the month of January. Sales activity had accelerated throughout 2024, peaking at an all-time high of 20,460 transactions in October before stabilizing at a more sustainable level.
Residential properties, including apartments, townhouses, and villas, made up 91% of total sales, amounting to 13,124 transactions. The most traded commercial properties were vacant land (4.2%), office spaces (1.9%), and hotel apartments (1.2%). A significant portion of land transactions—almost 400 out of 613—came from DAMAC Islands, mainly due to subdivision activities rather than an actual surge in demand. This procedural increase temporarily inflated land transaction numbers.
January saw 7,555 off-plan (Oqood) transactions, down 17.7% from the previous month, bringing their market share to 52.4%. Meanwhile, Title Deed sales rose by 15.7%, accounting for 47.6% of total transactions. Some villa and townhouse sales are classified as completed properties in Dubai Land Department records, even though they are still under construction. After adjusting for this, the true off-plan market share increases to 67.6%.
Resale transactions—sales of properties that had already been sold once—rose to 5,561, making up 38.6% of total sales. This represents a 1.7% MoM increase. While off-plan resales declined to 27.7%, the 12-month rolling average stands at 24.3%. The resale market has gradually grown over the past three years, with most transactions happening in properties nearing completion within 12 months. However, there is a slow shift towards resales of properties still 15 to 16 months away from handover, which may indicate a rise in speculative activity.
In January, developers launched 53 projects, introducing over 12,400 new off-plan units for sale. This continues the high launch activity seen throughout 2024. These launches came from 37 different developers, reflecting the widespread expansion of the off-plan market.
Apartments dominated the new supply, accounting for 86.7% of the total units, while townhouses made up 11.6% and villas just 1.7%. The off-plan sector remains highly active, with no immediate signs of slowing. Currently, more than 250 additional projects are in the planning phase, suggesting strong momentum for future development.
Mortgage transactions rose by 6.8% in January, with 4,134 loans recorded. New purchase mortgages accounted for 41.9% of borrowing, with an average loan amount of AED 1.97 million and a loan-to-value (LTV) ratio of 76.4%. Refinancing and equity release transactions grew by 3.0% to 28.4% of total mortgage activity. Bulk mortgages—typically issued to developers and large investors—made up 29.7% of total loans, slightly down by 1.1% from the previous month.
Among bulk mortgages, the highest volume was seen in projects like Sway Residences in Dubai Hills (217 mortgages), Domus Indigo 1 & 2 in Dubai Production City (209 mortgages), and Blue Wave Tower in Dubai Residence Complex (139 mortgages).
Mortgage transactions rose by 6.8% in January, with 4,134 loans recorded. New purchase mortgages accounted for 41.9% of borrowing, with an average loan amount of AED 1.97 million and a loan-to-value (LTV) ratio of 76.4%. Refinancing and equity release transactions grew by 3.0% to 28.4% of total mortgage activity. Bulk mortgages—typically issued to developers and large investors—made up 29.7% of total loans, slightly down by 1.1% from the previous month.
Among bulk mortgages, the highest volume was seen in projects like Sway Residences in Dubai Hills (217 mortgages), Domus Indigo 1 & 2 in Dubai Production City (209 mortgages), and Blue Wave Tower in Dubai Residence Complex (139 mortgages).
Source : Property Monitor