Dubai realty defies global trends, eyes 300,000 new housing units by 2028

Khaleej Times

a day ago

Dubai's residential real estate market continues to defy global trends, posting sustained growth in both sales volumes and values as the emirate retains its status as a leading destination for property investment.
With 73,000 new homes slated for delivery by 2025 and an ambitious target of 300,000 units by the end of 2028, Dubai is undergoing one of the most significant residential expansions in its history, according to consultancy Cavendish Maxwell.
Despite a slight quarter-on-quarter decline, the market remains firmly on an upward trajectory. In the first quarter of 2025, the city recorded 42,000 property sales transactions valued at Dh114.4 billion. While this marks a 10 per cent drop compared to the last quarter of 2024, it represents a striking 23 per cent increase from the same period in the previous year. Cavendish Maxwell's Director and Head of Residential Valuation, Ronan Arthur, noted that while prices began the year on a softer note, they are now stabilising. The average quarterly price increase stood at 2.8 per cent, down slightly from the 4 per cent average of 2023 and 2024, signaling a maturing market.
Almost 95 new projects were launched in the first quarter of 2025, bringing an anticipated 29,000 residential units to the market. About 9,300 of these units were completed during the same period — the second-highest quarterly figure in two years. Apartments accounted for nearly 80 per cent of the completions, with villas and townhouses making up the rest. Jumeirah Village Circle (JVC) led all areas in both completions and transactions, adding 4,330 units and recording 3,330 apartment sales.
Off-plan sales dominated activity, contributing Dh77.5 billion from 29,000 deals — roughly 70 per cent of all transactions and a 32 per cent increase year-on-year. The secondary market also showed resilience, with 13,200 transactions representing a 6.6 per cent annual rise. Apartments made up 75 per cent of total deals, though demand for larger homes is also increasing. Townhouses and villas represented 17 and 7 per cent of sales respectively, reflecting buyers' growing interest in more spacious living.
Luxury properties saw a notable upswing as well, with 590 homes sold at prices above Dh20 million, up from 480 in the same period last year. A majority — 67 per cent — of these high-end sales were off-plan, indicating a strong appetite for new developments among affluent investors. By March 2025, the average property price had reached Dh1,535 per square foot, a 16 per cent year-on-year increase.
V. Sivaprasad, chairman of Condor Developers, the prime property market continues to record steady surge in demand. 'The rise in the influx of wealthy buyers to Dubai continues to propel the luxury residential sector, defying general regional trends. Dubai's residential property market continues to flourish, driven by strong investor sentiment, a diversified demand base, and strategic planning. As the city evolves, developers and investors alike will need to navigate a more mature and dynamic landscape — one that increasingly rewards timely execution, smart planning, and long-term vision,' said Sivaprasad.
Rental dynamics, however, are showing signs of moderation. Annual rent growth stood at 14.4 per cent, but only one per cent on a quarterly basis — the slowest pace in two years. This could be a result of the growing supply of new units and the implementation of the Dubai Smart Rental Index, which is expected to bring more transparency and structure to pricing. Average rental yields remain attractive: 7.3 per cent for apartments and five per cent for villas and townhouses. Some areas, such as Dubai Investments Park, International City, and Downtown Jebel Ali, are offering yields as high as 10.3 per cent for apartments, while Industrial City leads the villa segment at 6 per cent.
Market optimism was further bolstered by record-breaking activity in May 2025. According to fäm Properties, Dubai saw property sales worth Dh66.8 billion during the month — a 49.9 per cent increase compared to May 2024. With 18,693 transactions, it became the second-highest month on record for volume. In contrast, May 2020 saw only Dh2.3 billion from 1,400 deals. This dramatic rise underscores the emirate's evolution into a global investment hub, fueled by economic stability and sustained interest from high-net-worth individuals.
Despite concerns raised by some analysts over a potential 15 per cent price correction, industry leaders remain confident. fäm Properties CEO Firas Al Msaddi dismissed the fears, stating that the market is not headed for a downturn but merely entering a phase of more measured growth. With over 360,000 residential units in the pipeline for the next five years but only a fraction nearing completion, demand appears well positioned to absorb incoming supply.