Dubai Real Estate Market Soars 23% in Q1 2025, Villa Sales Lead the Way
Dubai’s property market continues to break records, driven by strong villa demand, rising mortgage activity, and a surge in end-user interest.
Market Momentum Continues Into 2025
Dubai’s residential real estate sector maintained strong momentum in Q1 2025, with a 23% year-on-year increase in total property sales. According to new data from the Dubai Land Department, 42,422 sales transactions were recorded in the first quarter, totaling AED114 billion in value, a 29% jump from the same period last year.
Villas Outpace the Market
While apartments remained the most traded property type—making up 32,237 transactions, a 14% increase—villas emerged as the top-performing segment. Transactions for villas jumped 65% year-on-year, reaching 10,185 deals. Total villa sales value soared 56% to AED53.4 billion, as buyers seek larger living spaces and family-friendly communities.
Off-Plan Still Dominates, But Prime Buyers Shift to Ready Homes
The off-plan segment accounted for 59% of all transactions, with 24,942 deals, reflecting a 25% increase year-on-year. However, in the prime property segment, preferences are shifting. Off-plan transactions dropped 30%, while secondary market prime sales spiked 77%, highlighting growing demand for ready-to-move-in luxury homes.
Prices and Buyer Enquiries on the Rise
Betterhomes reported a 28% increase in average selling prices across Dubai. Villas led this surge with a massive 92% rise in average prices. Buyer enquiries also saw strong growth, up 14% year-on-year and 51% quarter-on-quarter, underlining deepening confidence in the market.
The Rise of the End-User and Mortgage-Backed Buyer
A significant shift in buyer profile was observed. End-users now make up 50% of the market, rising 22% from the previous quarter. Mortgage-backed purchases continued to climb, now representing 57% of all Betterhomes sales, with mortgage transactions up 21% year-on-year.
“The gap between renting and owning has never been smaller. Buyers are converting monthly rent into equity, with stabilized mortgage rates making ownership more accessible,” said Jeffrey De Souza, Head of Mortgages at Lomond.
Townhouses: The Breakout Segment
Townhouses saw the sharpest rise in buyer interest, with a 64% quarter-on-quarter increase in leads. On the leasing side, townhouse enquiries surged 199% year-on-year, reflecting a broader demand for space and lifestyle-oriented living.
Dubai’s Rental Market Sees 36% Spike in Demand
The rental market also grew substantially. Tenant leads were up 36% year-on-year, driven by population growth and an influx of families seeking long-term housing. Apartment rental enquiries grew 39%, while multi-year lease agreements gained popularity.
“We’re seeing tenants plan for longer stays in Dubai, opting for multi-year contracts that offer both security and savings,” said Rupert Simmonds, Director of Leasing at Betterhomes.
Luxury and Prime Properties in High Demand
Transactions for properties above AED15 million rose 44% year-on-year, with secondary market luxury sales climbing 77%. Popular investment areas include Palm Jumeirah, Emirates Living, and Downtown Dubai, where both local and international buyers continue to compete for premium assets.
Looking Ahead: New Supply on the Horizon
According to Property Monitor, 7,848 new residential units were completed in Q1 2025. The pipeline remains robust, with nearly 97,000 new units expected in 2026. Key upcoming off-plan launches are focused in Zabeel, Dubai Creek Harbour, and Dubai South.
Final Word
With robust sales, rising prices, and growing buyer confidence, Dubai’s real estate market in 2025 is proving its resilience and global appeal. Whether you’re looking to invest, upgrade, or make Dubai your home, DreamDwell Properties is here to guide you every step of the way.
📞 Ready to explore your options? Contact our team today for expert advice and exclusive listings.
