Dubai’s real estate market continues its impressive stride into 2025, with the first quarter showcasing significant growth in both the residential and commercial sectors. New data reveals a robust appetite for property in the emirate, but are the drivers the same for both segments, and can this momentum be sustained?
The latest report from Engel & Völkers Middle East confirms a buoyant start to the year for Dubai’s residential real estate. Sales transactions witnessed a substantial year-on-year increase of 22.4% in Q1 2025. This surge in volume is accompanied by an even more significant rise of 29.6% in the total value of residential properties sold during the same period. This strong performance underscores the enduring appeal of Dubai as a desirable place to live and invest, attracting both local and international buyers.
Both the off-plan and secondary markets contributed to this impressive growth. Off-plan sales saw a healthy jump of 23.9%, indicating continued confidence in new developments. Meanwhile, secondary market transactions also rose by a solid 20.3%, demonstrating sustained demand for existing properties across the emirate. Apartments remained the dominant property type, accounting for 76% of all residential transactions, with Jumeirah Village Circle (JVC) leading in both off-plan and resale segments.
The villa segment emerged as a star performer, recording a remarkable 80.6% year-on-year increase in transactions. This surge was primarily driven by off-plan activity in emerging communities like The Valley, Emaar South, and Damac Islands, suggesting a growing preference for family-oriented living in newer areas. The luxury segment also maintained its momentum, with sales above AED 10 million growing by 29% compared to Q1 2024.
While the residential market experienced a more pronounced upswing, Dubai’s commercial real estate sector also demonstrated positive growth in the first quarter of 2025. Commercial property sales transactions increased by 18.2% year-on-year, with the total value of these deals rising by 29.5%. This indicates a strengthening business environment and growing investor confidence in Dubai’s commercial prospects.
Breaking down the commercial sector, office sales transactions saw a significant increase of 40%, with the average price per square foot appreciating by 15% to AED 1,676. Key business districts such as Business Bay and Jumeirah Lakes Towers (JLT) remained prominent, recording the highest sales volumes. Retail sales, however, experienced a more modest year-on-year increase of 6%, concentrated in vibrant residential and mixed-use areas. Leasing activity in the commercial sector also picked up pace, showing a 17.6% quarter-on-quarter increase.
The robust performance of both the residential and commercial sectors in Q1 2025 paints a positive picture for Dubai’s real estate market. Strong investor sentiment, a growing population, strategic government policies, and ongoing infrastructure development are all contributing factors. While the residential market is currently experiencing a more rapid expansion, the steady growth in the commercial sector suggests a healthy and diversifying economy. The question now is whether these strong fundamentals will continue to fuel this upward trajectory throughout the remainder of the year.
Summary:
- Dubai’s residential property sales increased by 22.4% year-on-year in Q1 2025, with a 29.6% rise in total value.
- The commercial real estate sector also saw growth, with sales transactions up by 18.2% and total value increasing by 29.5%.
- The residential market was driven by strong off-plan and secondary sales, particularly in apartments and villas.
- Key performing areas for residential sales included Jumeirah Village Circle, Business Bay, and emerging villa communities.