Dubai realty market records 24% surge in value

Khaleej Times

05-02-2025

Dubai's real estate market recorded robust growth in January 2025, particularly in the off-plan segment, according to the latest data from Property Finder.
The market recorded approximately 14,238 transactions, marking a significant 23 per cent increase compared to January 2024. The total value of these transactions reached Dh44.4 billion, reflecting a 24 per cent rise year-on-year.
Property seekers displayed a clear preference for specific types of housing. Among those looking to invest or purchase properties, 31 per cent sought one-bedroom units, while 37 per cent preferred two-bedroom apartments. Studio apartments attracted 15 per cent of potential buyers. For villas and townhouses, 37 per cent were interested in three-bedroom units, and a notable 50 per cent favoured four-bedroom or larger options.
The most sought-after locations for apartments included Dubai Marina, Jumeirah Village Circle, Downtown Dubai, Business Bay, and Palm Jumeirah. Meanwhile, villa buyers showed strong interest in Dubai Hills Estate, Palm Jumeirah, Dubai Land, Al Furjan, and Damac Hills 2.
Rental preferences also highlighted market trends. About 59 per cent of tenants looking for furnished properties, while 39 per cent opted for unfurnished options. In the villa market, 52 per cent of tenants sought furnished units, compared with the 48 per cent looking for unfurnished ones. The top areas for rental searches included Jumeirah Village Circle, Dubai Marina, Downtown Dubai, Business Bay, and Deira for apartments, while Jumeirah, Dubai Hills Estate, Damac Hills 2, Al Barsha, and Al Furjan were popular for villas.
When examining the off-plan versus existing market dynamics, the existing market saw a significant uptick with approximately 6,918 transactions recorded — up from 5,185 in January 2024, which translates to a 32 per cent increase in transaction volume and a 41 per cent increase in value. Notably, Palm Jebel Ali achieved Dh2.1 billion in transaction value across 95 deals, while Al Yelayiss 1 experienced a remarkable surge, reaching Dh1.7 billion, up from just Dh102 million last year.
Conversely, the off-plan market experienced a slight decline of 1.3 per cent in transaction value, totalling Dh15.1 billion, down from Dh15.3 billion in January 2024. This marks the first decline in off-plan transaction value in three years. However, the number of off-plan transactions rose by around 15 per cent, comprising 52 per cent of total transactions in January 2025.
Cherif Sleiman, chief revenue officer at Property Finder, said January 2025 marked significant milestones in the UAE's real estate sector, showcasing resilient momentum. 'Recent initiatives, including the Dubai Land Department's expansion of freehold ownership, are reshaping the landscape by unlocking new opportunities for investors and homeowners.'
Sleiman also noted that the Central Bank of the UAE's emphasis on responsible lending is fostering a more stable financial environment, reinforcing long-term market growth. These developments align with the Dubai Real Estate Sector Strategy 2033, signalling a transformative phase for the industry.
ValuStrat forecasts that Dubai's residential market will continue its upward trajectory in 2025, albeit at a slower pace. Economic growth, rising demand, and positive sentiment contribute to this outlook, with capital values projected to increase by 5-10 per cent throughout the year.
Adding to this positive sentiment, Engel & Völkers Middle East reported that off-plan transactions accounted for 63 per cent of all property sales in 2024, up from 54 per cent in 2023. This shift indicates growing demand for new developments driven by competitive pricing and attractive payment plans. Total residential sales transactions surged by 40.3 per cent to 170,992 units in 2024, underscoring sustained investor confidence in Dubai's property market.
Luxury properties remain a focus, with Palm Jumeirah, Downtown Dubai, and Dubai Marina attracting high-net-worth individuals. Emerging developments like Palm Jebel Ali and The Oasis are generating new interest in off-plan projects, catering to buyers seeking exclusivity and long-term capital appreciation.
"The continued dominance of off-plan sales reflects a clear shift in buyer preferences, with investors looking for properties that offer long-term value," said Daniel Hadi, CEO of Engel & Völkers Middle East. "Government-led initiatives, such as long-term visas and free zone expansions, further enhance Dubai's appeal as a premier real estate investment hub."