UAE Real Estate Outlook 2025: Strong Momentum in Dubai and Abu Dhabi Amid Global Headwinds
Despite global economic uncertainty, the UAE’s real estate sector is off to a strong start in 2025. According to CBRE Middle East’s UAE Real Estate Market Review for Q1 2025, both Dubai and Abu Dhabi are showing sustained momentum across residential, commercial, hospitality, and industrial sectors.
At DreamDwell Properties, we’re seeing these trends firsthand through rising demand, limited supply, and a growing investor appetite across all key market segments.
Economic Resilience Fuels Growth
While the IMF revised its global growth forecast down to 2.8%—citing trade tensions and falling oil prices—the UAE’s diversified economy has remained resilient. A major boost has come from foreign trade, which reached AED 3 trillion ($817 billion) this year, a 15% increase year-on-year. Strategic initiatives like expanding trade partnerships and pro-business regulatory reforms continue to shield the UAE from external shocks.
Game-Changing Reforms: Free Zone Firms Gain Mainland Access
A significant shift came with Dubai Executive Council’s Resolution No. 11 of 2025, now allowing free zone companies to operate in mainland Dubai with approval from the Dubai Economic Department. This policy is expected to fuel entrepreneurship and increase demand for commercial and residential properties—an opportunity DreamDwell Properties is well-positioned to help clients capitalize on.
Dubai Residential Market: High Demand, Tight Supply
Dubai’s residential market delivered a standout Q1:
- Rental rates rose nearly 11% for apartments and 9% for villas.
- Transaction volumes jumped 23% year-on-year, with off-plan up 33%.
- Total transactions hit 43,000—one of the highest ever recorded outside Q3/Q4 2024.
- Sales value reached AED 115 billion ($31.3 billion), 69% of which came from off-plan deals.
At DreamDwell Properties, we’re seeing strong interest in waterfront developments and affordable communities. However, slower project handovers mean limited supply, pushing rental prices higher and making timing crucial for buyers and investors.
Abu Dhabi Residential Market: Steady Growth from End-Users
Abu Dhabi is also on a growth path:
- Residential price levels continued rising.
- Ready unit transactions rose 10% year-on-year.
- End-users and yield-focused investors are driving market activity.
Our team at DreamDwell Properties is actively helping clients explore these opportunities, especially in emerging residential zones with strong ROI potential.
Office Real Estate: Rising Rents, Limited Space
Both cities are feeling the crunch in the office market:
Dubai:
- Occupancy has hit 94%.
- Rents up over 20% year-on-year.
- New supply in 2025 is limited and mostly pre-leased.
Abu Dhabi:
- Occupancy at 96%.
- Office rents rose 13%, with prime rents up 15%.
- Lease renewals grew 9% as new space becomes scarce.
This makes early lease planning more important than ever. DreamDwell Properties offers tailored solutions to help businesses secure premium commercial space before prices climb further.
Hospitality Sector: Growth Continues Across Emirates
The tourism sector remains a bright spot:
- Dubai and Abu Dhabi each saw a 4% increase in visitors.
- Hotel occupancy in Dubai held steady at 82% YTD, while Abu Dhabi showed strong RevPAR growth.
The opening of 16 new hotels across the UAE in 2024 signals continued confidence in hospitality investments—an area where DreamDwell Properties offers valuable insight for investors looking to enter or expand.
Retail and Industrial: Stable Yet Selective Growth
Retail:
- Dubai expects 250,000 sqm of new retail space through 2026.
- Abu Dhabi will add just 150,000 sqm, making prime retail locations more competitive.
Industrial:
- Dubai warehousing rents surged 20% year-on-year.
- Abu Dhabi saw a 14% increase, driven by demand in KEZAD.
DreamDwell Properties helps logistics operators, developers, and investors find industrial assets that align with business goals and market trends.
The DreamDwell View: Confident Outlook, Smart Timing
Matthew Green of CBRE MENA summarized it well:
“Despite some macro-economic uncertainty… the outlook for the UAE remains very bright, supported by an increasingly diversified non-oil sector and diverse set of global trading partners.”
At DreamDwell Properties, we share this optimism. Whether you’re investing in off-plan properties, looking for high-yield commercial space, or relocating your business, the current market offers strong opportunities—with smart timing and the right guidance.
Let DreamDwell Properties be your partner in navigating the UAE’s thriving real estate landscape.
