Signs of tension are starting to emerge in Dubai's booming property market, which could surpass its longest bull run in just a few weeks.
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Buying property in Dubai in 2025 can be profitable, but it requires careful consideration. The market is showing both positive and alarming trends. Let's consider the key factors:
📊 Dubai Real Estate Prices and Trends in 2025
🔼 Price increases and demand
- General rise in prices: In Q1 2025, Dubai house prices increased by 2.8% compared to the previous quarter and by 15.8% compared to the same period last year. DarGlobal
- Segments with the highest growth: In Q3 2025, the AED 5 million to AED 10 million price segment saw the largest increase in transactions, up 60% compared to last year, indicating strong demand for mid- to high-end properties. Construction Business News ME
- Total volume of transactions: In the third quarter of 2025, the volume of transactions in the residential market amounted to AED 138 billion (approximately US$37.6 billion), an increase of AED 181 billion compared to the same period in 2024. arabianbusiness.com
🔽 Expected price correction
- Fitch Ratings ForecastsFitch forecasts a moderate decline in Dubai property prices by 10-15% between the end of 2025 and 2026, following sharp price increases in previous years. Reuters
- Increase in supply: Around 182,000 new housing units are expected to enter the market in 2025-2026, which could lead to lower prices in some segments. colife.ae
🏘️ Recommendations for investors
- Investments in finished real estate: The completed property market remains stable, especially in prime areas such as Downtown Dubai, Palm Jumeirah and Dubai Marina.
- Consideration of off-plan projectsThe off-plan segment (property under construction) remains popular among investors, accounting for 70% of all transactions in the third quarter of 2025. However, it is important to take into account possible delays in the delivery of properties. arabianbusiness.com
- Portfolio diversificationTo reduce risks, it is recommended to diversify investments, including properties in different areas and price segments.
🏙️ Forecasts and Prospects
- Long-term prospectsDespite the expected price correction, Dubai remains attractive to investors thanks to its stable economy, growing population and favorable tax policy.
- State initiatives: The Dubai government continues to implement the D33 strategy, which aims to double the city's economic size and transform the city into a leading global financial hub, which could further boost the real estate market.
✅ Conclusion
Buying property in Dubai in 2025 can be profitable if you consider current market trends and carefully select your investment. Consulting with local experts and carefully analyzing the market offers is recommended.
Dubai Real Estate Market News:
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The impressive price growth, which has lasted nearly five years, was driven by sales of off-plan properties, as well as completed luxury villas and townhouses. If prices continue to rise in October, the city will break a record of 57 consecutive months of price increases, according to data provider Reidin.
Rating agencies expect prices to begin falling early next year as thousands of new properties are commissioned each month. Potential "flippers" are already experiencing difficulties reselling off-plan properties they bought with the intention of quickly flipping them, analysts and brokers note.
The glut of new homes is "beginning to experience a deepening demand," Property Monitor reported, with 93,000 new properties entering the market this year. There is strong demand for villas and homes for wealthy families, but 95 percent of new listings are apartments.
New homes in Dubai
Credit rating agency Moody's said this month that during the period 150,000 new homes will be commissioned between 2025 and 2027, which "will likely curb five-year price increases." The agency expects "a moderate price correction starting in 2026." Earlier this year, Fitch Ratings forecast a price decline of approximately 15 percent.
Prices per square foot are 25 percent higher than their previous peak in 2014., not adjusted for inflation. The boom was driven in part by investors seeking to take advantage of lower prices compared to Western cities, as well as the growing population in this low-tax port.
"A slowdown in some segments is inevitable," said Chris Whitehead, managing partner of Dubai Sotheby's International Realty, a company specializing in luxury real estate sales to wealthy clients. "No real estate market in the world can grow indefinitely."
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He said the upper end of the market is unlikely to suffer, but the oversupply in the mass market "creates risks for the future."
According to analysts, one of the first areas to cool down was flippingIn a September review, Property Monitor noted that resales of unfinished properties had "significantly declined," warning: "Quick profits from resale before completion are never guaranteed." Flipping previously accounted for about a third of the resale market, but in July its share had fallen to 20% (%).
An investor who put an unfinished apartment on the artificial island of Palm Jumeirah up for sale admitted that he had not received a single offer in three months.
“Many speculative investors were sold the illusion of easy money,” said Alec Smith, head of residential sales and leasing at Savills Dubai.
He added that off-plan resales work best when the investor holds the property until construction is complete: this attracts buyers looking for a finished home. "Not all brokers are upfront about this," Smith noted.
Current figures Q1 2025
- Transactions: 45,474 (+22 % y/y) to AED 142.7 billion (+30 %). Property Finder
- Average sales price: AED 1,535 per ft² (+16 % y/y). markets.businessinsider.com
- Off-plan: 1,926 AED per ft² (+29 %). Zawya
- Luxury villas: prices have risen by 13 % since Q3 2024. Zawya
The market remains the Gulf's top destination thanks to low taxes, a growing population and Golden Visa programs. Business Insider
Why demand remains high
- Taxes. There is no personal income tax, capital gains tax or rental tax.
- Infrastructure. New Al Maktoum Airport, Metro Expansion, Dubai 2040 Smart City. Property Finder
- Tokenization of assets. DLD and VARA are introducing fractional ownership, opening the market to small investors. Property Finder
Is it worth buying now?
Prices are high, but yields are also growing. In premium areas (Palm Jumeirah, Dubai Hills) the yield is 5-6 % per annum, while bank deposits give ≤ 3 %. Compare targets:
- Short horizon: It is better to consider off-plan with a 60/40 scheme.
- Long horizon: Choose ready-made villas with the right to a long-term resident visa.
Advice: Most exhibitions offer free tickets if you register online 60 days in advance.
Dubai confirms its status as a safe haven for capital. If you are looking for:
- Investment for rent - take a look at the ready-made studios at JVC.
- Family housing - DAMAC Lagoons Villas offer payments of 1 % per month.
- Speculative growth — select off-plan projects near the Expo metro line.
We will help you select a property, conduct a transaction and obtain residency.
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In January 2024, Dubai’s property transaction volume increased by 27 per cent year-on-year to reach AED 35.4 billion ($9.6 billion), Property Finder data shows. Property Finder’s January 2024 report marks a strong start to the year for Dubai’s property market. According to Property Finder, the market saw a 17 per cent increase in the number of property transactions compared to last year, with the number of transactions exceeding 11,000, up from 8,712 in January 2023.
Is it worth buying property in Dubai?
The January 2024 report highlights the vibrant development of Dubai's real estate sector.
Dubai Property Market Growth in January 2024
The UAE is known for its investor-friendly practices. Investments in Dubai are not subject to annual property taxes, income taxes, capital gains taxes, rental income taxes or value added tax (VAT). This allows the investor to allocate a much larger financial portfolio to the purchase of real estate and, in turn, earn higher returns.
The transaction volume reached AED 35.4 billion, an increase of AED 27% compared to last year.
In January 2024
:Dubai property market growth: Transaction volume increased by 27% to reach AED35.4 billion.
