Dubai’s residential market is entering a more balanced phase after two years of exceptional growth. ValuStrat’s Q3 2025 Real Estate Review shows a clear cooling in rental pressure: average rents rose 2.1% in Q3 versus 5.5% in Q2, bringing annual rental growth to 14.8%. Villas in established areas such as Arabian Ranches and Palm Jumeirah are even seeing slight quarterly declines as more stock becomes available, which means tenants are beginning to regain negotiating power.
On the sales side, demand is consolidating around mid-tier apartment communities, including Jumeirah Village Circle, Business Bay, and Arjan. These areas continue to attract buyers due to comparatively accessible pricing, new launches, and improved affordability following the recent US rate cut. ValuStrat’s index shows values remain 21.6% higher year-on-year, though quarterly increases are now more measured as more than 28,500 homes have been delivered this year, roughly 85% of them apartments.
With around 200,000 additional units expected by 2027, Dubai is moving towards a more sustainable balance between supply and demand. For residents, this translates into greater choice and more stable rents. For investors, it remains a yield-driven, income-focused market rather than a purely speculative one.
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