In the first quarter of 2025, 111 luxury homes worth $1.9 billion were sold in Dubai. Analysts fear that global instability may affect the market.
Dubai Luxury Real Estate Market Sees Continued Growth in Q1 2025
Dubai’s luxury real estate market experienced continued momentum during the first quarter of 2025, with high-net-worth buyers once again dominating transactions for homes priced above $10 million, according to a Bloomberg-sourced report published by UNN.
Based on insights from Knight Frank, a property consultancy firm, the period from January to March saw the sale of 111 luxury homes, collectively worth $1.9 billion—marking a 5.7% increase compared to the same time frame last year. Included in these sales were 12 properties valued at $25 million or higher.
These strong sales figures signal that Dubai’s real estate sector remained on an upward trajectory through the early months of 2025, preceding the broader economic disruptions that followed the imposition of international tariffs announced by U.S. President Donald Trump in April.
Despite the strong performance, experts caution that Dubai’s real estate market could face new challenges. Global uncertainties, including fluctuating oil prices, may prompt wealthy buyers to proceed more cautiously, potentially affecting the region’s luxury housing segment.
Faisal Durrani, Knight Frank’s Head of Middle East Research, stated that the current data underscores an ongoing demand from ultra-high-net-worth individuals (UHNWIs) in search of rare, high-end properties. However, he also emphasized the importance of monitoring market sentiment closely, particularly as external global factors continue to evolve.
“It’s still too early to draw definitive conclusions, but sentiment is one area we need to observe carefully,” Durrani remarked. “Negative perceptions, even those arising from external events, can influence the local market.”
Since 2020, Dubai has seen a surge in property interest driven by its progressive visa reforms and pandemic-era initiatives, which have made the emirate more attractive to international investors. As a result, the upscale real estate segment—particularly premium villas along man-made palm-shaped islands—has attracted a steady stream of affluent expatriates.
Among the top-performing areas in Q1 was Palm Jumeirah, which recorded 34 sales of properties above the $10 million mark, totaling $562.8 million in transaction value, according to Knight Frank’s data. Meanwhile, the overall supply of ultra-luxury homes has been declining, with listings for properties priced over AED 50 million dropping by 48% last year.
Durrani also expressed concerns about the potential impact of newly introduced duties on global supply chains, particularly those involving construction materials.
“There’s a question of how these changes might influence the delivery of future developments. Could this delay timelines or complicate logistics? Even so, some delays might actually benefit the market by ensuring more measured growth,” he added.
