Three reports out this week point to a maturing residential and commercial property market in Dubai, marked by slower price growth but increased resilience.
Prices for villas and high-quality offices continued to climb in the emirate during the second quarter of this year, according to research by industry consultancies Knight Frank and Savills.
However both segments exhibited signs that they are becoming more sustainable for the long term as the steep growth of the past few years stabilises, at least in some corners.
“Genuine” buyers, or those who acquire homes for personal purposes, are behind a much larger share of residential purchases than they were as the global financial crisis unfolded in 2008, bringing Dubai’s real estate down with it the following year, Knight Frank found.
Resales of residential properties within 12 months of purchase – an indicator of volatility – now represent just 4 to 5 percent of activity compared to 25 percent in 2008, according to Will McKintosh, the company’s head of residential real estate for the Mena region.
“We are seeing the property market mature and align with global norms in a meaningful way,” McKintosh said.
“It has become more stable, more transparent and is underpinned by solid fundamentals.”
Rents for prime offices, meanwhile, are 36 percent higher than at the same point last year, with companies chasing larger and larger spaces, Savills found.
Nevertheless, prices were unchanged over the previous quarter in 11 of the 23 neighbourhoods the company monitors.
This is a reversal from the “steady and constant growth” in 2024 and an indication that the market is entering “a more balanced phase”, according to Rachael Kennerley, Savills’ director of research for the Middle East.
“While core areas remain in high demand, we’re now seeing occupiers adopt more considered strategies, including securing future space in advance or exploring emerging locations with better affordability,” she said.
Dubai South and Expo City, which offer larger offices, lower rents and improved transport, may especially benefit from the trend, according to the Savills report.
Dubai home prices rose 13.7 percent annually in the second quarter overall, with villas going on average for 16 percent more than at the same time in 2024, the Knight Frank report found.
More than 51,000 residential properties changed hands from April to June, a quarterly record.
A transaction value of AED268 billion in the first six months of the year, 41 percent above where the market stood at this stage last year, puts 2025 on track to overtake the AED367 billion of home sales throughout 2024.
“The sustained growth in prices … is a clear sign of a more stable and predictable market environment,” said Faisal Durrani, Knight Frank’s head of research for Mena, cautioning that the villa segment may warrant close monitoring.
“Just 20 percent of the planned housing supply through to the end of 2029 will fall in the villa category,” he said.
“With demand remaining centred on stand-alone family homes, the delta between villa and apartment price performance may well continue to widen.”
A third consultancy, ValuStrat, also found in its second-qaurter report that Dubai’s freehold residential market continues to grow in 2025 but at a slower pace than the previous year.
Apartment prices were up more than 19 percent annually, and villa prices 28.7 percent, according to the company. The respective figures for 2024 were 23.4 percent and 33.4 percent.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - June 2025
