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Dubai's real estate market was off to a strong start in 1Q with a 7% y-o-y uptick in market activity, seeing a total transaction value of AED 179 bn, according to EFG Hermes’ latest Dubai Property Tracker report.
The busiest segment: Residential transaction activity accounted for 72% of total transactions for the quarter, with the 49.6k units sold bringing a total value of AED 128.6 bn — a 23% y-o-y increase, but a q-o-q decline of 8%. Land transactions made up 23% of the total, while 2% of transactions came from the office segment.
Ready, sale, mortgage: Off-plan sales accounted for the majority of activity at 60%, followed by ready sales at 26%. Mortgage transactions made up 14% of transactions for the quarter. Off-plan sales were up 28% y-o-y to AED 74.2 bn, with primary sales dominating transaction activity in the sector following an uptick of new projects launched recently, with Palm Jebel Ali and The Valley seeing the most demand. Ready-for-sale units saw an 11% uptick y-o-y in sales during the quarter, with apartment units seeing the most demand at 53%.
Mortgage transactions were up 30% y-o-y but down 29% q-o-q. The yearly uptick in mortgage activity was attributed to declining interest rates, with the 3M Emirates Interbank Offered Rate (EIBOR) recording a three-month low in January, as the one-year EIBOR saw an uptick, however.
Price-wise: Average prices fell 2% q-o-q from “an exceptionally high base” in 4Q 2024, EFG Hermes said, and 79% of transactions fell in the “affordable” or “budget” ranges, while the luxury segment accounted for the remaining 21%. Transaction values in the budget segment rose 59% y-o-y, however, whereas the luxury segment saw a 2.7% drop y-o-y.
Rental yields remained stable, with Abu Dhabi's yields exceeding Dubai's in February and March 2025 — the first such occurrence since March 2022. Areas seeing the most demand for new contracts were Jumeirah Village Circle and International City.
The value of office rentals surged 21% q-o-q to reach AED 2.4 bn on the back of an uptick in lease contracts, with new leases representing 70% of total agreements. Business Bay, Jumeirah Lake Tower, and Downtown Dubai saw the strongest demand for office spaces.
