Dubai Property Market Soars in Q1 2025 with AED 179B in Deals

Dubai’s real estate sector has charged into 2025 with remarkable momentum, posting AED 179 billion in total property transactions during the first quarter — a powerful testament to sustained investor confidence and dynamic market conditions.

Population Boom Fuels Unprecedented Demand

A significant driver behind this surge is Dubai's rapidly growing population. According to ValuStrat, the city welcomed approximately 89,695 new residents in Q1 2025, averaging about 1,000 people per day, bringing the total population to 3.92 million by the end of March. This influx has intensified the demand for housing, with apartment prices rising by 21.4% and villa prices increasing by 30.3% year-on-year.

Off-Plan Sales Dominate, Fueled by Palm Jebel Ali & The Valley

Leading the charge were off-plan transactions, which accounted for a commanding 60% of all property deals. This surge was particularly pronounced in high-demand areas like Palm Jebel Ali and The Valley, where developers reported record interest from both local buyers and international investors seeking early access to Dubai’s next-generation communities.

The sharp rise in off-plan demand reflects both speculative investor appetite and end-user interest in securing properties at today's prices ahead of expected future appreciation.

Residential Market Powers Growth

Residential sales continued to be the primary engine of growth, underpinned by a wave of new developments and a diversified housing supply. From luxury beachfront villas to affordable suburban townhouses, Dubai’s residential offerings remain globally competitive in both value and lifestyle appeal.

A notable trend this quarter was the rising dominance of budget-friendly units, especially in emerging communities where infrastructure expansion and lifestyle amenities are drawing in first-time buyers and young families.

Mortgages Climb as Interest Rates Fall

Mortgage activity surged 30% year-on-year, buoyed by a more favorable lending environment. With the UAE seeing a gradual decline in interest rates, buyers are locking in competitive home financing deals, further stimulating demand in both the off-plan and ready markets.

Banks have responded by loosening credit criteria slightly and launching flexible payment plans, encouraging a wider demographic of buyers to enter the market.

Office Sector Rebounds: Business Bay & Downtown in Focus

While residential stole the spotlight, Dubai’s commercial property sector is showing fresh signs of life. Office rental demand spiked in Q1 — particularly in Business Bay and Downtown Dubai — as companies expand operations amid a robust post-pandemic economic rebound.

Flexible office spaces, coworking models, and high-quality fit-outs are drawing interest from startups and global firms alike, signaling a potential shift back toward prime central business zones.