Dubai’s residential market is witnessing extraordinary demand as the city absorbs a sharp increase in new residents. According to the Market Report, the population grew by nearly 90,000 in the first quarter of 2025 alone, an average of 1,000 people per day, bringing the total to 3.92 million by the end of March. This growth significantly surpasses the net population increase observed in 2024, which averaged fewer than 500 new residents daily.
Rising Prices and Limited Affordability
The growing population has put considerable pressure on the availability of affordable housing. According to the Real Estate Market Report, prices continue to climb across all residential categories. Apartment values saw a 21.4% year-on-year increase, while villa prices rose by 30.3%. Concurrently, rental prices experienced notable growth, with apartment rents rising by 10% and villa rents increasing by 5.1%.
The limited availability of housing units relative to demand has contributed to a challenging environment for home seekers, especially those looking for budget-friendly options. Securing a reasonably priced property is becoming increasingly difficult as affordability continues to decline
Demand Outpaces Supply
In 2024, only 27,000 new housing units were completed—marking a six-year low in new deliveries—while the city’s population continued its upward trajectory. This imbalance has created intense demand, with supply lagging behind despite ongoing development efforts.
The government’s supportive policies, such as long-term residency options for retirees and remote workers, along with the expansion of the Golden Visa programme, have further bolstered population inflows and housing interest.
New Residential Projects and Future Outlook
Looking ahead, approximately 61,580 new units are expected to be delivered in 2025, with apartments comprising 70% of the total and villas or townhouses making up the remaining 30%. In the first quarter alone, nearly 12,000 of these units were completed.
More than 170,000 residential units are currently under construction, with anticipated delivery stretching into 2029. A significant portion of this development activity is concentrated in Jumeirah Village Circle (12%), followed by Business Bay (7%) and Jumeirah Lakes Towers (5%).
Secondary Market and Off-Plan Activity
In Q1 2025, 12,396 transactions for secondary ready homes were recorded, representing a 5.8% annual increase but a 7% quarterly decline. Investment in these transactions reached Dh33 billion. Off-plan Oqood contract registrations were down 8% compared to Q4 2024 but remained 37.5% higher year-on-year, totalling Dh77.3 billion in investments.
Mortgage and Cash Transactions
Mortgage activity saw 9,388 transactions across all asset types in the first quarter, with a total value of Dh21 billion. Meanwhile, cash transactions for completed properties stood at 14,386 deals, amounting to Dh33 billion.
“Although a decline in both sales and mortgage applications was observed this quarter, it is consistent with typical market cycles and may signal a future correction due to the supply-demand gap,” stated the Market Expert.
Long-Term Trends in Property Valuation
Apartment capital values, despite recent growth, remain 8.1% below their peak levels from a decade ago in most communities. However, specific areas such as Palm Jumeirah, The Greens, and Jumeirah Beach Residence have surpassed previous highs. In contrast, villa prices have surged, averaging 59.9% above their 10-year highs.
Q1 2025 saw villa capital gains jump by 30.3% annually and 6.2% quarter-on-quarter. The strongest performance was observed in communities like Jumeirah Islands, Palm Jumeirah, Emirates Hills, and The Meadows. Mudon, however, recorded the lowest growth within the villa segment.
Apartment values also saw strong gains, with annual growth of 21.4% and quarterly appreciation of 3.8%. Leading areas included The Greens, Dubailand Residence Complex, Palm Jumeirah, Town Square, and The Views.
Rental Trends Remain Upward
Rental prices have continued to rise, particularly for apartments. While villa rents remained stable on a quarterly basis, they grew by 5.1% year-on-year. Apartment rents increased by 1.6% quarter-on-quarter and posted a 10% annual gain, as reported in the Real Estate Market Report.
Source: https://www.thenationalnews.com/business/property/2025/05/03/dubai-housing-rents-property/
