Engel & Völkers: Dubai Tenants Shift from Renting to Buying Homes

Dubai, UAE – September 15, 2025 – A growing number of Dubai residents are opting to purchase homes rather than continue renting, signaling a major shift in the city’s residential property market, according to a new report by Engel & Völkers Middle East, a leading provider of premium residential and commercial real estate services.

The report highlights a 22% increase in secondary market sales during the first eight months of 2025 compared to the same period last year. This rise reflects growing confidence among residents who now see Dubai not just as a temporary destination, but as a long-term home base.

“For many tenants, ownership is no longer aspirational; it’s becoming the preferred choice for long-term security and value creation,” said Daniel Hadi, CEO of Engel & Völkers Middle East.

This transition is particularly evident among families and young professionals looking to build equity, secure stability, and escape rising rental costs.

August Market Highlights Strong Growth

Dubai’s residential market hit another milestone in August, recording 17,879 transactions worth $11.55 billion (AED 42.4 billion), a 17% increase in volume and 12% rise in value year-on-year, according to Engel & Völkers.

Off-plan sales continued to dominate the market, climbing 25% year-on-year and accounting for nearly three-quarters of all transactions. Meanwhile, the secondary market maintained strong momentum, driven by end-user demand.

Larger family homes were in particularly high demand:

• Four-bedroom property sales surged 70% year-on-year
• Five-bedroom and larger properties rose 63% year-on-year

Property Prices on the Rise

Average property prices are also continuing their upward trajectory. According to Property Monitor, average prices reached AED 1,664 per square foot in August, representing a 16.3% increase year-on-year.

Villas saw especially strong gains in lifestyle-led communities:

• Victory Heights: +37% YOY
• Dubai Hills Estate: +26% YOY
• Arabian Ranches: +23.2% YOY

Apartments also posted solid growth:

• Jumeirah Village Triangle: +29.3% YOY
• Jumeirah Village Circle: +17% YOY

Rental Yields Remain Among the World’s Highest

Despite rising property prices, rental yields remain a cornerstone of Dubai’s global appeal.

• Overall average gross yield: 6.76%
• Apartments: 7.12%
• Villas: 4.92%

These yields outpace many leading global markets, including:

• London: 3–5%
• Singapore: 3–4%
• New York: 5–7%

Dubai’s strong yields are supported by a growing population, new company formations, and a limited supply of quality rental stock.

Leasing Volumes Reflect Ownership Trend

Overall leasing volumes declined 4% year-to-date, with:

• New contracts falling 14%
• Renewals increasing 2.6%

The luxury rental segment showed the most notable change, with large villa leases dropping by double digits, indicating that many families are choosing to buy rather than rent.

Broad-Based Demand Across Local and International Buyers

Demand remains diverse and robust, fueled by both local residents and international investors.

Off-plan sales are seeing strong participation from buyers across India, the UK, Germany, Egypt, and China, while residents are driving the surge in resale transactions.

Mortgages are playing a key role, with loan-to-value ratios between 70–80% and interest rates starting around 3.9%, which remain competitive globally. Additionally, cash purchases and developer-backed payment plans continue to power off-plan sales.

“Dubai’s market today is being fueled by a dual dynamic: strong global investment flows into off-plan projects and a clear shift among residents toward homeownership,” added Hadi.

Engel & Völkers predicts that this dual momentum will carry into the final quarter of 2025:

• Off-plan sales will continue to grow, driven by developer activity, flexible payment plans, and international demand.
• The resale market will strengthen as population growth and competitive mortgages encourage tenants to transition into ownership.

“Dubai’s property market is no longer just about short-term investment cycles. It is increasingly about residents choosing to establish roots here, buying homes for security, lifestyle, and long-term value creation,” Hadi concluded.

This shift marks the next phase in Dubai’s real estate evolution, where global investment meets local ownership, shaping a sustainable future for the city’s property market.