Dubai has recorded its strongest residential year on record for 2025, with total sales value reaching AED547 billion ($149 billion), up 28% year-on-year, across 203,000 transactions, with a 20% increase in volume, according to a report by betterhomes, an international proptech and real estate agency.

Liquidity remained concentrated in investable stock. Studios and one- to two-bedroom apartments accounted for 77% of transactions, while 72% of deals fell within the AED 500,000–AED 3 million range, reinforcing market depth and resale velocity. 

Dubai’s residential market closed 2025 against a backdrop of accelerating economic growth and low inflation, creating a stable foundation for real estate activity, stated the company in its Full-Year Dubai Residential Market Report for 2025. 

UAE real GDP expanded 3.9% year-on-year in Q1 and 4.5% in Q2, with growth forecast to exceed 5% in 2026, while inflation remained contained at 1.3% in 2025.

“What defines 2025 is the quality of growth rather than just the pace,” said Louis Harding, CEO of betterhomes. “Economic expansion, low inflation and population growth are reinforcing each other, creating a more durable foundation for real estate activity.”

“This was not a narrow or speculative cycle,” Harding added. “Liquidity was broad, repeatable and focused on segments where both end-users and investors continue to transact with confidence.”

Off-plan activity dominated the year, accounting for 65% of total transactions and 53% of total value, driven primarily by apartments. Apartment sales reached AED 325 billion (+29% YoY), while villas and townhouses contributed AED 221 billion (+26% YoY). Despite a rapidly expanding supply pipeline, average sale prices rose 12% year-on-year to AED 1,673 per sq ft, demonstrating the market’s capacity to absorb new supply without price erosion.

Transaction activity broadens across sales and leasing as mortgages hit 52%, said the report.

Leasing activity accelerated sharply in 2025, with betterhomes leasing transactions rising over 60% year-on-year, supported by strong family-led demand. Despite higher volumes, rents held firm at an average of AED 207,000 per year.

Rupert Simmonds, the Director of Leasing at betterhomes, said: "Leasing momentum in 2025 came from people moving forward, not prices running ahead. Stable rents alongside higher transaction volumes reflect a market driven by families and long-term tenants making deliberate housing decisions."

Buyer demand also strengthened, with a 33% year-on-year growth, while mortgages accounted for 52% of transactions, overtaking cash. Investors remained the majority at 57% of purchases for a fourth consecutive year. India and the UK continued to lead buyer nationalities, while Dubai’s luxury segment deepened further, with average prime selling prices rising 26% year-on-year to AED 30 million.

On its 2026 outlook, betterhomes said Dubai’s 2025 performance points to a residential market supported by structural fundamentals rather than excess. 

With economic growth accelerating, population expanding, and pricing holding firm amid rising supply, the sector enters 2026 from a position of broad demand, strong liquidity, and structural resilience, it added.-TradeArabia News Service