Q2 2025 real estate figures Dubai: Record growth, highest ROIs & where to invest

Dubai's real estate sector again exceeded all expectations in the second quarter of 2025 (Q2 2025). It was the strongest quarter ever, cementing the emirate's position as a top destination for international investors. For anyone looking to invest in Dubai real estate, it is essential to understand the drivers behind this historic growth.

Record-breaking performance in Q2 2025

Q2 2025 was extraordinary for Dubai's real estate market. The total number of sales transactions reached an unprecedented AED 184.3 billion (about $50.2 billion) spread across 53,252 deals. This means:

• A 49% increase in annualized value.
• A 22% increase in volume year on year.

This historic performance builds on the strong momentum of Q1 2025, underscoring Dubai's reputation as a resilient and attractive real estate market, even amid global economic uncertainty.

Growth was mainly driven by solid demand for both existing and new construction projects, reflecting high investor and end-user confidence. The median property price rose to AED 1,607 per square foot in Q2 2025, compared with AED 1,514 in Q2 2024. This shows consistent price growth and fuels investor confidence.

Deeper dive: performance by real estate segment

The Dubai 2025 real estate market showed exceptional strength in all its segments:

Existing real estate market: buying over renting

This segment delivered a record-breaking performance in Q2 2025:

• 22,975 transactions, up 33% from Q2 2024.
• Total value: AED 115.5 billion, up 62% year-on-year.

This growth is largely driven by the shift from renting to buying, as rising rents encourage residents to homeownership.

New construction (off-plan) real estate Dubai: investing for the future

The off-plan real estate Dubai segment also reached new heights:

• 30,277 transactions, an annual volume increase of 16%.
• Total value: AED 68.8 billion, up 31% year on year.

Off-plan sales made up the majority of all Q2 transactions (57%), reflecting strong long-term confidence among home seekers and investors. Business Bay was a top area for off-plan housing, with more than AED 4.5 billion in transactions in Q2 2025.

Luxury and ultra-luxury segment: exclusive opportunities

This luxury market experienced an unprecedented boom in Q2 2025:

• Sales of homes over $10 million reached a record $2.6 billion.
• This is an increase of 37% over Q1 2025 and 63% over Q2 2024.
• 143 such deals were recorded, including 22 transactions above $25 million.
• Interestingly, apartments (80 sales) surpassed villas (63 sales) for the first time since Q2 2023, indicating increasing demand for luxury apartments.
• Palm Jumeirah, La Mer and Downtown Dubai remained the leading locations.

"Real estate millionaires" in Dubai

Dubai has 110,000 residential units worth more than $1 million. About 37,000 of these are owned by "accidental millionaires" - buyers whose properties have significantly increased in value. This phenomenon underscores robust capital appreciation and continued confidence in Dubai's residential market among the affluent.

Rental market dynamics: attractive returns

The Dubai rental market remains robust, making it an attractive proposition for investors looking for recurring income.

• The average gross rental yield in the UAE was 4.87% in Q2 2025.
• The average rental yield in Dubai was 6.31% as of 2025.

This is significantly higher than many developed markets worldwide, such as London (3.4%), New York (3.7%) and Singapore (3.5%).

Studio apartments generally offer the highest rental yields. Areas such as Al Furjan and Arjan showed yields of 8.75% and 8.20% for studios, respectively. Jumeirah Village Circle (JVC) stands out with excellent rental yields for all property types, with most units generating yields above 7%.

The continued rise in rental prices, especially for villas and townhouses (22.6% annual increase in March 2025), is encouraging residents to switch from renting to buying.

Supply, demand and the development pipeline

The interplay between supply and demand remains crucial. The Dubai market currently faces a significant shortage of housing, especially in the villa segment.

• Projections: Only 19,700 new villas are expected by the end of 2025, with another 19,700 planned for next year. This is significantly less than the growing demand for larger family homes.
• Scarcity: This has already increased villa prices by 26% in 2024, and further increases are expected in 2025.

However, developers are actively responding to demand. More than 350,000 residential units are expected to be completed by the end of 2029. Notable upcoming projects include Mr. C Residences Downtown Dubai (Q1 2027) and Jumeirah Residences Emirates Towers (Q3 2030). This robust pipeline indicates the responsiveness of developers and the long-term growth potential of the market.

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Key market drivers and policy impact

The strength of real estate Dubai 2025 is significantly supported by strategic government actions and broader economic trends:

• Proactive Governance: Flexible policy making, updated licensing protocols and stricter regulation of brokers have led to increased transparency and strengthened investor confidence.
• Global Asset Migration: Robust market performance reflects increasing global asset flows. More than $10.3 billion in private capital from regions such as India, Saudi Arabia, the UK and East Asia is specifically destined for Dubai's residential market. Dubai welcomed 6,700 new millionaires in 2024, more than any other city worldwide, reinforcing its status as a safe haven for wealth preservation and growth.
• Economic Growth and Strategic Initiatives: The UAE economy is expected to grow at an annual average of 4.5% to 5% by 2025, with real estate being a major contributor. Government policies such as the Golden Visa program, which grants long-term residency to real estate investors, have attracted more than 100,000 individuals. In addition, the First-time homebuyer program (FTHB) is aimed at improving accessibility to homeownership.

Geographic hotspots and investment opportunities

The Dubai market offers several opportunities for those looking to invest in Dubai real estate:

• Total sales (Q2 2025):
  • Jumeirah Village Circle (JVC): 4,930 transactions, AED 6.47 billion.
  • Business Bay: 3,143 transactions, AED 10.05 billion.
  • Me'Aisem Second: Best performing area in terms of total value, with AED 14.94 billion.
• Luxury sales (over $10 million):
  • Palm Jumeirah: Led with 28 properties sold.
  • La Mer: 23 sales.
  • Downtown Dubai: 16 transactions.
• Rental yields (2025 average):
  • Al Furjan: Average 7.54%.
  • Arjan: 7.41%.
  • JVC: 7.30%.
• Emerging areas with significant growth potential are Palm Jebel Ali and Meydan Avenue, both of which have seen value increases of more than 200% over the past five years. Dubai South, with its proximity to the Expo site, offers growth potential of 12-15%.

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Outlook and potential risks

The outlook for the Dubai 2025 real estate market remains mostly positive for the rest of 2025 and beyond. Savills forecasts that capital values of prime residential real estate in Dubai will grow by 8% to 9.9% in 2025, making it the highest of the 30 global cities tracked. The city is also expected to experience the strongest rental growth, with an expected increase of more than 10%.

Despite the strong base, potential headwinds include:

• A sharp global economic downturn.
• A significant drop in oil prices.
• The risk of supply outstripping demand in certain segments, which can lead to "early price fatigue."
• Policy changes, such as shifts in visa policies or the introduction of new taxes.
• Rising construction costs and interest rate fluctuations.

Conclusion: why invest in Dubai real estate now?

Dubai 's real estate market has shown remarkable resilience and growth in Q2 2025. This has been driven by a powerful combination of strong demand, strategic government policies and continuous inflows of global wealth. For investors, this means plenty of opportunities, from high-yield rental properties (such as those in the Dubai rental market) to luxury projects and promising off-plan property Dubai with substantial appreciation.

Although global economic factors deserve monitoring, Dubai's proactive governance and robust economic fundamentals provide a strong foundation for sustained growth. This makes the emirate an exceptionally attractive destination for long-term real estate investment.

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