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YoY Performance of Dubai’s Real Estate Market in 2025: Prices, Supply & Outlook
Dubai real estate market has emerged as one of the world’s most dynamic and investor-friendly property sectors.
Attracting both local and international buyers in search of residential, commercial, and luxury properties it represents a highly urbanized and sophisticated living with better career growth opportunities for individuals
To make investment decisions in a fast-changing environment, it becomes vital to consider prior Year-on-Year (YoY) price transitions.
This article will provide comprehensive YoY price evaluation of the Dubai property market in 2025, providing further perspective on
- The most recent trends in the residential and commercial market, high-demand communities, and performance overall in the primary market compared to secondary market.
- The factors affecting Year-on-Year pricing, including considerations of government policies, Demand & Supply, and external shocks.
- The insights for investors and buyers, considering price predictions in the short and long run.
Using a combination of data evidence and analysis, the goal of this article is to provide readers with an engagement with an often highly competitive, and resilient property market in Dubai.
Intrigued? Let’s get straight into it.
Dubai Real Estate Market and YoY Price Change
The real estate market in Dubai is diversified with residential, commercial, and luxury real estate.
The residential sector has been the leading contributor to market growth with the Residential Market Sales Price Index gaining 15.6% year-on-year in 2025, as a result of continued end-user demand for apartments and villas.
Apartment prices increased by 15.22%, while villas were up 17.81%, continuing to attract investor interest from international markets, first-time buyers and end-users.
Population growth, tourism, economic diversification and government programs support the real estate innovation in Dubai. The Dubai real estate sector has shown resilience and capital appreciation evident in the increases in price transactions and rental yields.
The Average Year-on-Year (YoY) price change is a common metric in real estate to benchmark property price from the prior year in the same quarter. For the investor, it is important to understand YoY price changes, as well as the monthly price change on a year basis for understanding price changes and to identify new opportunities in making knowledgeable buy or sell decisions and potential projections of corrections in the market.
Recommended Read: How to Assess Property Value?
Analysis of YoY Price Trends in Dubai
The residential real estate market in Dubai continues to experience a dynamic, high-growth environment in 2025.
Supplied Market Performance
Year-over-year data in the residential market from all three KPIs show a great year. The largest change in the price index Residential Market Sales Price provided by REIDIN (2025), shows annual growth of 15.60%.
The villa market grew year-on-year due to demand on larger living spaces and continues to trade at a higher price gain than the apartment market.
| Category | YoY Growth (%) |
| Residential Market Sales Price Index | 15.60% |
| Apartment Prices | 15.22% |
| Villa Prices | 17.81% |
Transaction Activity and Value
Residential sales activity continues to be dominant in this realm. The activity witnessed a significant increase in both volume and value during the first six months of 2025 as the off-plan sector continued to be strong.
The overall transaction value of AED 262.7 billion (USD 71.5 billion) is indicative of considerable capital inflows and increased investor confidence.
| Metric | Value |
| Transaction Volume | 94,000 units (+23.04% YoY) |
| Transaction Value | AED 262.7 Billion (+37.68% YoY) |
| Apartment Share (Volume) | 78% |
| Off-Plan Share (Volume) | Dominant across both segments |
Median Asking Price by Unit Type
The shift toward larger, family-oriented homes is evident in the median asking price data, with two-bedroom apartments and three-bedroom villas showing the most aggressive price growth.
| Unit Type | Q1 2025 (AED) | Q1 2025 (USD) | YoY Change (%) |
| Apartments | |||
| Studio | AED 700,000 | USD 190,606 | 11.11% |
| 1-bedroom | AED 1,280,000 | USD 348,536 | 10.34% |
| 2-bedroom | AED 2,170,000 | USD 590,878 | 17.30% |
| 3-bedroom | AED 3,970,000 | USD 1,081,007 | 10.28% |
| Villas | |||
| 3-bedroom | AED 2,900,000 | USD 789,653 | 18.37% |
| 4-bedroom | AED 3,900,000 | USD 1,061,947 | 6.85% |
| 5-bedroom | AED 13,540,000 | USD 3,686,862 | 7.63% |
Supply and Market Outlook
Here’s a breakdown of supply and market outlook
Current and Upcoming Supply
Delivery momentum remains consistent in the market, with approximately 9,400 residential finished units total in Q1 2025—the second-highest quarterly total in two years.
The key focus continues to be the future-supply pipeline, which remains unprecedented in size.
| Supply Pipeline (Projected) | Figure | Notes |
| Q1 2025 Completions | 9,400 units | 79% apartments |
| Remainder of 2025 | 73,000 units | Expected for delivery |
| Total Projected by 2028 | Nearly 300,000 units | Substantial portion scheduled for 2026 and 2027 |
Market Forecast
According to analysts, including Fitch Ratings, a modest correction is anticipated in the latter half of 2025 as the rather large number of new units’ starts to outstrip population growth.
This likely transitioning to a more mature, normalized market, with key prime locations, such as Palm Jumeirah and Downtown Dubai, remaining robust. Developers’ credit risk and a strong regulatory environment help mitigate systemic risk.
Rental and Mortgage Market Dynamics
Here’s a breakdown of the dynamics of rental and mortgage market dynamics:
Rental Market Reverses
While rental price inflation remains high, it is beginning to reverse, partly due to the new supply of completed units being absorbed into the rental market from the New Smart Rental Index.
Apartment rental growth is driving the market, while villa renting increases are tapering.
| Metric | Value |
| Annual Rental Growth | 8.5% (down from 21.1% YoY) |
| Apartment Rent YoY Growth | 9.0% |
| Villa Rent YoY Growth | 5.7% |
| Overall Gross Rental Yield | 6.78% |
Consider Reading: Short-Term vs Long-Term Rentals in Dubai: Which One Is Right for You?
Mortgage Activity
Housing-related lending is increasing, bolstered by a stable interest rate environment (CBUAE Base Rate held at 4.40% in June 2025).
The number of mortgage transactions experienced a substantial year-on-year increase, demonstrating growing interest from potential buyers and long-term tenants in becoming homeowners as the rent versus buy gap continues to narrow.
| Metric | Value |
| Mortgage Transaction Volume | 9,300 transactions (+24% YoY) |
| Mortgage Transaction Value | AED 20.4 Billion (+46.8% YoY) |
| Dominant Buyer Type | Cash Buyers (≈87% of all purchases) |
Factors Affecting YoY Price Movements
- Year-on-year (YoY) price movements in Dubai’s real estate market can be attributed to economic stability, government reforms, strong demand, and investor confidence.
- The low inflation rate (1.14%), stable mortgage rates (3.9%-4.75%), and the tie of peg of USD to the UAE Dirham all provided enhanced buying power, to the advantage of foreign demand in 2025.
- Other government initiatives – like long-term visas and further clarity on foreign ownership – only added to the confidence in the Dubai areement market.
- The completion of 9,400 new units in Q1, 2025 has not transitioned the market away from the demand side optimism of the past few years. The demand for housing in a few prime locations (i.e. Palm Jumeirah, Downtown, Business Bay) continues to emerge stronger than the supply.
- The stability of Dubai as a safe, high gross yield market, the continued focus on tourism, which remains at record levels, and diversification of Dubai’s economy away from oil is fuelling continued price appreciation.
All year-on-year price movement trends show a good and careful moderation of economic fundamentals, government support, tight supply and investor demand.
Implications for Investors and Buyers
The implication of the YoY change could have the following implications on investors and buyers:
- Year-on-year (YoY) pricing trends help investors with timing their decisions, asset performance comparison and understanding high growth segments.
- The villa segments in prime locations such as Palm Jumeirah, Dubai Hills Estate and Damac Hills 2, continue to perform competitively for buyers versus apartments, with strong long-term appreciation potential.
- Year-on-year trends also pointed to rising hotspots like Business Bay, Downtown Dubai, and Dubai Marina and with strong demand, solid return and major infrastructure under construction.
Overall, understanding and applying YoY trend methodology will offer benefit potential for investors.
Predictions and Outlook
Here’s a quick breakdown of further predictions and outlook about YoY dynamics of Dubai real estate market:
Short-term and long-term YoY price expectations
Dubai is forecasted to experience a small decrease in residential prices yearly in the near future and inventory will be added into the system.
- There are such prime locations as Palm Jumeirah, Downtown Dubai, and Business Bay which will continue to stabilize prices with apartments and villas showing 8-12% price increases YoY.
- Long-term forecasts indicate the range and stability will remain, due to constant population growth, constant demand for quality housing stock, and investor confidence.
Mega-Project impact
- Development of the Expo 2020 legacy projects and the Dubai Creek Tower, as well as upgrades to transport networks, will increase property prices in surrounding areas.
- These projects improve connectivity, and will continue to attract domestic and global demand, and support a long-term stable demand in the market.
Foreign Investment and Rental Yields
- Dubai continues to be a popular location for foreign investors, due to its progressive property regulations, long-term visas, and low transaction costs.
- From all sectors of the city, rental yields are strong across the market averaging 6.31% with apartments reaching as high as 7.24%. This is a good return on investment.
Dubai’s real estate market has displayed both resilience and long-term growth potential. There is still the possibility of short-term price fluctuations, fuelled by some level of new supply or external factors.
However, demographic growth, mega-projects, and overall demand should keep the supply side attractive with healthy and good prospects from an investment perspective.
Key Takeaways
In 2025, the Dubai real estate market saw impressive year-on-year growth with villas and larger apartment units becoming the most sought after product for end-users and investors.
With strong economic stability, the volume of transactions, off-plan sales and rental yields have remained strong.
Rising supply may create some short-term corrections, but the long-term outlook remains positive with population increase, mega-projects and continued demand for prime communities.
For more information on investing in Dubai real estate, get in touch with our highly experienced professionals at TAQ Global Properties:
- Location: Office 1003, Dusseldorf Business Center, Al Barsha, Dubai, United Arab Emirates
- Contact: +971 44561405
- Email: info@taqproperties.ae
