A Dubai government initiative will make it easier for first-time buyers to enter the property market, experts have said, after the emirate recorded its strongest quarterly performance yet.
The total value of Dubai real estate sales in the three months to June 30 surged by 49 percent year on year to reach AED184.3 billion ($50.1 billion), a quarterly record, according to Property Finder in Dubai.
The volume of transactions also climbed, by 22 percent year on year to 53,252.
For housing the average price per square foot rose by 4.5 percent month on month in May to AED1,808 ($492), according to broker Better Homes.
Residential sales prices are projected to grow by a further 10 percent by December, which would represent full-year growth of 18 percent, says Valustrat.
Despite its buoyancy, the Dubai market is tough for first-time buyers. The typical minimum down payment for first-time expatriate investors is upwards of 20-30 percent of the property value. They must also pay the 4 percent Dubai Land Department fee and additional broker fee.
The down payment requirement is lower for UAE nationals, at about 15 percent.
However, real estate experts are hopeful that a scheme announced by the Dubai Land Department this month will ease access for first-time buyers.
Under the initiative, which is being rolled out with 13 developers and five banks, any Dubai resident aged 18 and over with an Emirates ID will be able to buy a property valued at up to AED5 million.
Buyers will have priority access to new homes through a government portal and be offered a flexible payment plan. Loan-to-value ratio and other financing criteria will be left to the banks’ discretion. There are additional benefits such as discounts from developers and the ability to pay the land department fee on credit cards with zero interest rates.
The Dubai Land Department says it expects the scheme to attract 5,000 new buyers in the year ahead.
Setting lower loan-to-value thresholds of under 20 percent for first-time-buyers “will help to strengthen the city’s appeal to this segment of the market”, said Faisal Durrani, partner and head of research at Knight Frank Mena.
“The initiative will contribute to the wave of demand from families moving to Dubai or those that have recently arrived.”
The market is maturing, demonstrated by a rise in the number of “genuine end users” as opposed to investors and a decline in the number of homes being sold within 12 months of purchase, Durrani added.
Sales within a year have fallen from 25 percent in 2008 to 4-5 percent today.
Most of the property reports for May and June are based on data from before the conflict between Israel and Iran, so it is too soon to see what impact the geopolitical tensions will have.
Data provider Bayut is expecting the residential sales growth to continue for the rest of the summer. It has recorded annual growth of up to 38.5 percent over the June-September period for the past three years.
However, ratings agency Fitch said at the end of May that real estate prices were likely to drop by up to 15 percent in the second half of this year and into 2026.
This is down to a doubling in off-plan deliveries this year compared to the previous three years. The increase in supply will push prices downwards, Fitch said.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - June 2025
