Dubai’s residential market saw prices rise 7.8% q-o-q in 1H 2025 and 16.6% y-o-y, buoyed by strong local and international demand that saw the market rebound in 2Q, according to Cavendish Maxwell’s latest market report. The residential sector saw some 91.9k transactions worth AED 262.1 bn in 1H 2025, up 22.9% in volume and 36.4% in value y-o-y. Transaction volumes were down 2.4% when compared to 2H 2024, however, after muted activity in 1Q.

Strong demand across both off-plan and ready segments and a surge in project launches helped boost performance, the report said. Communities like Discovery Gardens, Al Furjan, Motor City, and Dubai Marina posted double-digit price growth.

Off-plan still leads, but ready sales rebound: Off-plan sales accounted for 70.2% of all residential transactions in 1H 2025. While off-plan volumes dipped slightly from 2H 2024, they remained dominant, supported by attractive payment plans and ongoing launches. Ready sales picked up as well, particularly in 2Q, driven by demand for immediate occupancy and income-generating assets, especially among buyers wary of project delays.

Villas, while making up just 6.9% of transactions, accounted for nearly 30% of total value, reflecting their premium positioning. The luxury segment (AED 20 mn+) saw 1.4k transactions in 1H, up 82.5% y-o-y, as the emirate continues to attract high-net-worth buyers. Apartments accounted for the lion’s share of activity, making up 80% of total sales.

Residential rents were up 9.9% y-o-y as lower renewal rates and increased supply gave tenants more leverage. Renewals made up nearly 67% of the total rental contracts.

Rental yields soften but remain strong: Gross rental yields edged down to 7.2% for apartments and 5% for villas and townhouses as price growth outpaced rents. Dubai Investments Park, International City, and Dubai Studio City posted the highest apartment yields, while Industrial City and JVC led villa/townhouse returns.

Mortgages were also popular: Despite a dip in 1Q, mortgage activity was up 36.7% y-o-y across different property types during the six-month period, with villa mortgages in particular increasing in value as buyers turn their focus to larger-sized, higher-value villas.

Still short on supply: Developers completed some 17.3k units in 1H and launched around 87.9k new units across roughly 300 projects, equivalent to 490 homes per day. Over 61.8k units are in the pipeline for 2H, but only 21% of these have reached 75% construction progress, signaling potential delays in delivery. Developers are expected to continue ramping up launches, while initiatives like the first-time buyer program could help broaden demand.

The bigger picture: Dubai’s wider real estate market recorded AED 431.2 bn worth of transactions from 123.3k transactions during the first six months of this year. Demand was more tempered for industrial and logistics space in the emirate, however, amid high rents and tight supply.

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