Dubai posted its strongest residential performance on record in 2025, with total transaction value climbing to AED 547 billion (USD 149 billion), marking a 28% year-on-year increase. The market recorded 203,000 transactions during the year, reflecting a 20% rise in volumes, according to a report by international proptech and real estate agency betterhomes.
Market liquidity remained firmly anchored in investable assets. Studios and one- and two-bedroom apartments represented 77% of total transactions, while 72% of deals were concentrated within the AED 500,000 to AED 3 million price bracket, underscoring sustained market depth and strong resale momentum.
The residential sector concluded 2025 amid robust economic expansion and subdued inflation, providing a stable macroeconomic backdrop for real estate activity, betterhomes noted in its Full-Year Dubai Residential Market Report 2025.
UAE real GDP growth reached 3.9% year-on-year in the first quarter and accelerated to 4.5% in the second quarter, with forecasts indicating growth above 5% in 2026. Inflation remained well contained at 1.3% throughout 2025.
“What stands out in 2025 is the strength and sustainability of growth, not merely its speed,” said Louis Harding, CEO of betterhomes. “The alignment of economic expansion, low inflation and population growth is underpinning a more resilient real estate market.”
“This cycle was neither narrow nor speculative,” Harding added. “Liquidity was broad-based and consistent, with both end-users and investors continuing to transact confidently across core segments.”
Off-plan sales led market activity, accounting for 65% of total transactions and 53% of overall value, largely driven by apartment demand. Apartment transactions totalled AED 325 billion, up 29% year-on-year, while villas and townhouses generated AED 221 billion, reflecting 26% annual growth. Despite a growing supply pipeline, average sale prices increased 12% year-on-year to AED 1,673 per square foot, highlighting the market’s ability to absorb new inventory without downward pressure on pricing.
The report noted a broadening of transaction activity across both sales and leasing, with mortgages accounting for 52% of purchases.
Leasing activity strengthened significantly during the year, as betterhomes recorded a more than 60% increase in leasing transactions year-on-year, supported by sustained family-driven demand. Despite higher volumes, average rents remained stable at approximately AED 207,000 per annum.
