Dubai’s residential market also appears to be nearing its peak: Property price growth in Dubai has slowed to its weakest annual rate since late 2020 in 3Q 2025, Knight Frank said in its latest Residential Market Review (pdf). Average values rose 2.5% q-o-q and 10% y-o-y, down from the 16% pace seen a year earlier, signaling a maturing cycle. Knight Frank also estimates a higher jump in villa prices, with 12% y-o-y growth in prices and 3.6% q-o-q, while apartment prices are estimated to have risen 9.6% y-o-y and 2.3% q-o-q.

Villa prices remain 55% above a previous 2014 peak and 124% higher than early 2020, supported by tight supply and strong demand from high-salaried residents. La Mer was the standout, up 54.7% y-o-y, while Emirates Hills, Jumeirah Islands, and Arabian Ranches also logged strong gains. In contrast, supply-heavy districts such as Expo City and Dubai South saw prices cool as an uptick in supply on the back of new completions hit pricing.

Prime apartments remain in demand: Palm Jumeirah led annual price growth for apartments (+31%) on tight supply, followed by Dubai Marina (+15%). Meydan City posted the sharpest quarterly rise (+22% q-o-q) on new completions and investor demand. Supply-heavy areas like Dubai Creek Harbour saw mild corrections as nearly 5.8k units were delivered since 2023, with another 7k scheduled through 2029.

Total sales reached AED 117 bn in the quarter, slightly above 3Q 2024, bringing 9M transactions to more than AED 310 bn — one of Dubai’s highest 9M totals on record. Aggregate transactions volumes for 9M reached AED 401.7 bn. Knight Frank attributes the strength to robust end-user demand, ongoing wealth migration, and deep international inflows.

Off-plan dominates: Off-plan sales represented more than 72% of 3Q transaction value. Emaar (17.6%), Damac (9.6%), and Binghatti (7.4%) captured over one-third of off-plan value. Jumeirah Village Circle (JVC), Business Bay, and Dubai Investment Park remained the busiest off-plan markets. Secondary sales have tripled since 2021, reflecting deeper liquidity.

Mortgaged sales accelerate: While cashbuyers still made up 86% of 9M transactions, mortgage activity is rising sharply. Over 23k homes were bought with mortgages in 9M 2025 — more than double 2021 levels — as the 12-month EIBOR eased to 3.9%. JVC, Dubai Marina, and Villanova saw the most mortgage-backed purchases.

Ultra-luxury demand climbs: Dubai remained the world’s busiest USD 10 mn+ market, logging 103 such sales in 3Q, up 24% y-o-y, and 357 in 9M, up 26% y-o-y. Quarterly transaction value reached USD 2 bn, up 54% y-o-y. The priciest transaction was a AED 350 mn mansion in La Mer.

Looking ahead: Knight Frank’s outlook points to much slower gains ahead, with prime prices expected to rise just 3% and mainstream residential values 1% in 2026 as the market stabilizes.

REMEMBER- We’ve been expecting a correction: Knight Frank forecasts 8% full-year growth this year (vs. double-digit in 2024), while Fitch expects a 10-15% correction as early as 2H 2025, and Moody’s expects prices to dip or stabilize over the next 12-18 months. Reports of speculative strain are also rising, with off-plan resales falling to 20% of total resales in July, down from one-third earlier in the year.

Oversupply risks build: Knight Frank warns of a growing supply overhang, with 350k homes registered for delivery between 2026-2030 — nearly 70k annually, almost double Dubai’s historical average of 36k. Even assuming only 70% of projects complete, annual deliveries would average 66k, raising softening risks in high-pipeline areas including JVC, Dubai South, Expo City, and Dubailand.

The property boom has fueled a surge in issuances by property developers: Developers across the UAE have issued more than USD 6 bn in USD bonds and sukuk since 2021 — a twelve-fold increase — as they race to secure land and expand project pipelines during one of the Gulf’s longest real-estate booms, according to Bloomberg data. Newer issuers including Arada, Binghatti, and Omniyat have joined longstanding names such as Emaar, Aldar, and Damac in tapping debt markets.

The surge has created a large repayment schedule, with about USD 8 bn in maturities due by 2030. Analysts warn that a global slowdown, geopolitical shocks, or lower oil prices could weaken sentiment and expose leveraged buyers if developers face delivery delays. “In debt markets, the flood of new real-estate sukuk deals could test market appetite, particularly as investors look to avoid over-exposure to a single sector,” Fady Gendy, fixed-income portfolio manager at Arqaam Capital, told the business news information service, adding that some signs of “investor fatigue” are already appearing, with recent transactions trading below their re-offer price and higher new issue premiums paid.

Private credit fills funding gap: With banks approaching their real-estate exposure limits, private credit is becoming a key funding channel. Omniyat secured a USD 100 mn private credit facility from Nomura earlier this year, and lenders say most current demand for non-bank financing is coming from developers.

IPO interest is also growing: Several developers — including Binghatti, Samana, and Arada — are considering potential IPOs to raise capital and improve governance. Investors say any future market downturn would likely widen valuation gaps between developers based on leverage, delivery track record, and financial resilience.

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