Dubai real estate posts strongest year on record as market shifts toward sustainable growth

Dubai’s real estate market delivered its strongest performance on record last year, with residential sales reaching Dh546.8 billion across 202,349 transactions, according to Engel & Völkers Middle East’s 2025 Annual Market Report. While activity hit historic highs, the year also marked a shift in market dynamics, with growth becoming broader, deeper, and increasingly driven by long‑term fundamentals rather than rapid acceleration.

“2025 was a defining year for Dubai’s real estate market. It delivered exceptional scale and confidence, but more importantly, it marked a shift in the market’s evolution,” said Daniel Hadi, chief executive of Engel & Völkers Middle East. He pointed to Dubai’s political stability, competitive tax environment, strong infrastructure, and long‑term vision as key factors underpinning sustained demand from both investors and end‑users.

Residential transactions continued to be dominated by apartments, which accounted for 83 percent of total deals. Apartment transactions climbed to 167,841, with sales value rising to Dh328.5 billion, up 31.8 percent from 2024. Growth was driven by strong off‑plan activity alongside steady demand in established communities, reflecting ongoing confidence in Dubai’s development pipeline.

Off‑plan sales represented 64.8 percent of all residential transactions during the year, a sign of continued investor appetite as well as limited availability of ready stock in the secondary market. Engel & Völkers noted that secondary‑market activity remained constrained by supply rather than weak demand.

“What stood out most in 2025 was the depth of demand we are seeing across all property types and locations,” said Robert Villalobos, head of brokerage at Engel & Völkers Dubai. “Buyer interest remains exceptionally broad‑based, and activity in the secondary market continues to be driven by real end‑user and investor demand rather than short‑term sentiment.”

The villa segment also widened beyond traditional prime neighborhoods, with total sales value rising to Dh141.2 billion, an increase of 30.5 percent year-on-year. Demand was especially strong in the upper mid‑market price bracket between Dh4 million and Dh8 million, supported by families and long‑term investors committing to new master‑planned communities.

Townhouses recorded their highest annual volume on record, with 22,904 transactions, up 4.6 percent from 2024. Total sales value increased to Dh74.4 billion, underlining sustained demand for family‑oriented housing amid population growth and evolving lifestyle preferences.

Dubai’s luxury market remained a standout performer, with 6,765 transactions above Dh10 million. Palm Jumeirah retained its leadership in the ultra‑prime segment, while Jumeirah and La Mer strengthened their roles as key luxury hubs. Landmark deals during the year included a Dh550 million off‑plan penthouse at Bugatti Residences in Business Bay and a Dh425 million villa sale in Emirates Hills.

Looking ahead, Engel & Völkers expects Dubai’s market to enter a more selective phase in 2026, characterized by consolidation and differentiated performance. “Overall, the outlook for 2026 is one of stability, depth, and continued opportunity,” Hadi said, as growth becomes increasingly driven by fundamentals rather than momentum.