Dubai Residential Market Q4 2025: Prices, Demand Trends and 2026 Outlook

Dubai’s residential real estate market closed 2025 on a historic high, with record-breaking transaction volumes, sustained demand across both apartments and villas, and growing confidence from end-users and investors, according to the Savills Dubai Residential Market – Market in Minutes (Q4 2025) report.

The latest data highlights a market that has moved beyond recovery and into a more mature, disciplined growth cycle, supported by population expansion, high-net-worth inflows, and a steady pipeline of new developments.

Record Transactions Drive Market Momentum

Dubai recorded over 200,000 residential transactions in 2025, representing an 18% year-on-year increase, with Q4 alone delivering more than 50,000 transactions for the third consecutive quarter.

This unprecedented activity translated into capital value appreciation across most submarkets, underlining the depth of demand despite rising prices and higher financing thresholds.

Off-Plan Sales Dominate Buyer Demand

Off-plan transactions continued to dominate Dubai’s residential market, accounting for 72% of total transactions in 2025, up from 68% in 2024 and 60% in 2023.

Savills notes that while overall absorption rates have moderated, high-quality projects from reputable developers are still selling rapidly, often within weeks of launch. Attractive payment plans and strong long-term investment fundamentals remain key drivers for both investors and end-users.

Apartments Lead Volumes, Villas Hold Premium Appeal

Apartments accounted for 83% of all residential transactions in 2025, with off-plan sales making up the majority of demand in this segment . Established communities such as Jumeirah Village Circle (JVC), Business Bay, and Dubailand continued to record the highest transaction volumes.

Villas and townhouses maintained an 18% share of total transactions, with strong activity concentrated in locations including Damac Island City, The Valley, DIP 2, and Damac Hills 2 . These five locations together accounted for nearly half of all villa and townhouse transactions in 2025.

Pricing Trends Show Stability with Selective Growth

Capital values continued to rise, supported by demand for upgraded and renovated properties in established communities. The average apartment price remained around AED 1.9 million, while villa and townhouse prices crossed AED 6 million, up from AED 5.4 million in 2024 .

Average rates per square foot increased by 6% year-on-year for apartments and 10% for villas, reflecting sustained buyer appetite for quality residential stock.

Supply Pipeline Expands, But Demand Remains Resilient

Developers launched over 875 projects comprising approximately 170,000 units in 2025, with apartments accounting for 86% of new supply .

More than half of all transactions were concentrated in Zone 6 along the Al Khail corridor and Dubailand, reinforcing these areas as key residential growth corridors due to accessibility, affordability, and scale .

Luxury and Prime Housing Gain Momentum

Demand for prime and ultra-luxury housing strengthened significantly in 2025. Over 6,700 properties priced above AED 10 million were transacted, marking a 43% year-on-year increase .

High-net-worth individuals relocating to Dubai and investing in second homes continued to fuel demand in premium locations such as Palm Jumeirah, Palm Jebel Ali, and The Oasis.

2026 Outlook: Growth with Selective Cooling

Looking ahead, Savills expects Dubai’s residential market to remain resilient in 2026, supported by population growth and investor confidence, while gradually transitioning from undersupply toward potential oversupply in certain segments .

While villas and well-located prime stock are likely to remain relatively tight, some affordable apartment districts may experience temporary imbalances, reinforcing the importance of careful asset selection and realistic yield expectations.

Conclusion

Dubai’s residential property market has entered a new phase of maturity. Record transaction volumes, sustained off-plan demand, and disciplined development activity have positioned the city as one of the most active and resilient real estate markets globally. As 2026 approaches, quality locations, reputable developers, and well-planned communities are expected to remain the key drivers of performance.

Download the Savills Dubai Residential Market Q4 2025 Report (PDF)

Source & Attribution

Source: Savills – Dubai Residential Market in Minutes, Q4 2025.
This article is an independent summary and interpretation published by MasidProperties for informational purposes.