Robust investor confidence, population growth, and infrastructure investment continue to fuel cross-sector expansion.
Dubai Real Estate Market Report Q1 2025: Residential & Commercial Sectors See Strong Growth – Engel & Völkers Middle East
Dubai, UAE – Engel & Völkers Middle East, a recognized leader in luxury real estate services, has released its Dubai real estate market report for Q1 2025, showcasing remarkable performance across both residential and commercial property sectors. Residential property sales in Dubai surged by 22.4% year-on-year, while the total sales value climbed 29.6%, fueled by strong investor confidence, population growth, and continued foreign investment. Commercial real estate sales also increased by 18.2%, with the overall transaction value up by 29.5%.
Despite the typical seasonal cool-down from Q4, Dubai’s residential real estate market maintained positive momentum. Off-plan property sales rose by 23.9%, while secondary market transactions grew by 20.3%, indicating robust demand across entry-level and luxury price points.
Apartments in Dubai dominated activity, representing 76% of all residential transactions. Jumeirah Village Circle (JVC) continued to lead in both off-plan apartment sales and resale activity, supported by its affordability, attractive rental yields, and strategic location near major roads. Other key areas like Business Bay, Dubai Marina, and Downtown Dubai showed strong secondary market movement, driven by their lifestyle appeal and rental demand.
The villa segment experienced a substantial 80.6% increase in transactions year-on-year, largely led by off-plan sales in emerging master communities like The Valley, Emaar South, and Damac Islands. The total transaction value for villas rose 55.1%, showing a clear trend towards family-friendly, affordable housing options in new Dubai suburbs.
Dubai’s luxury property market remained strong. Properties priced above AED 10 million grew by 29% since Q1 2024 and by 185% compared to Q1 2022. Palm Jumeirah and Palm Jebel Ali accounted for 31% of high-end property sales, especially for ultra-luxury waterfront villas. Notable deals included the AED 425 million sale of the “Marble Palace” in Emirates Hills, and a AED 115 million villa in EOME at Palm Jumeirah, brokered by Fadi Alsalem from Engel & Völkers Private Office.
Dubai has solidified its position as a global magnet for high-net-worth individuals (HNWIs). According to Henley & Partners, Dubai’s millionaire population has more than doubled in the last decade. The UAE led global HNWI migration in both 2023 and 2024, with over 81,000 millionaires, 237 centi-millionaires, and 20 billionaires now residing in the emirate—figures that are set to grow further.
The Dubai rental market reflected continued population growth, with over 51,000 new residents added in Q1 alone. Though rental hikes are slowing, select areas saw substantial year-on-year gains. Bluewaters recorded a 14.1% increase in luxury apartment rents, while Dubai Hills Estate villas rose by 33.8%, and Arabian Ranches by 20.6%.
On the commercial side, Dubai’s office space market saw a 40% rise in sales transactions, with the average price per square foot increasing by 15% to AED 1,676. Business Bay and JLT topped the charts for Grade A office sales, logging 315 and 217 transactions respectively. Off-plan investment in Capital One positioned Motor City as a key up-and-coming office destination. Meanwhile, retail property sales rose by 6% year-on-year, with hotspots including Arjan, JVC, and Business Bay.
Leasing activity across the commercial real estate market rose by 17.6% quarter-on-quarter, with office rents up 23% to AED 112 per square foot, driven by demand in core business districts like Business Bay, JLT, and Dubai Investments Park. Retail rents remained stable at AED 240 per square foot, although demand for Grade A commercial space is expected to push prices higher later in the year.
“Amid global economic uncertainty, Dubai continues to demonstrate solid real estate fundamentals with consistent growth across all sectors,” said Daniel Hadi, CEO of Engel & Völkers Middle East. “This demand is supported by regional capital flow, inbound migration, visionary governance, and the city’s standing as a future-focused business and lifestyle destination.”
Recent infrastructure announcements—such as the Etihad Rail project, the upcoming Dubai Loop system, and key road expansions—are anticipated to enhance the city’s infrastructure and connectivity.
Additionally, the AED 5 billion redevelopment of the Mall of the Emirates, announced in Q1 2025, reflects unwavering confidence in Dubai’s retail and commercial sectors from major developers.
Looking forward, Engel & Völkers expects Dubai’s real estate market to continue attracting global investors, business leaders, and new residents alike. “Whether residential or commercial, Dubai is fast becoming the world’s go-to destination for high-performing, secure real estate investments,” Hadi concluded.
