In Q2 2025, Dubai’s residential market saw record high property sales, with nearly 37,000 off-plan transactions averaging AED3.1 million ($844,000) per unit. Ready home sales also surged, increasing by 10.4 percent quarter-on-quarter, resulting in 13,700 title deed registrations at an average price of AED2.7 million ($735,000). The report estimates 66,596 new homes will be delivered in 2025, with approximately 17,500 completed in the first half of the year.
The ValuStrat Price Index (VPI) shows that capital values in Dubai’s freehold residential market grew, albeit at a slower pace than in 2024. Apartment prices increased by 19.1 percent year-on-year, while villa prices rose by 28.7 percent. Rental growth moderated, with villa rents up 4.8 percent and apartment rents increasing by 7.2 percent annually. Notable areas for price appreciation included Palm Jumeirah and The Greens.
Office market
The office market remains robust, driven by economic growth and business expansion. Office capital values increased by 4.9 percent quarterly and 23.7 percent annually, reaching a new high according to the VPI. The average office valuation is AED21,603 per sq m. Areas like Downtown Dubai and DIFC saw significant capital appreciation, with Grade B offices growing by 29.6 percent year-on-year.
The demand for office space is supported by a strong economic outlook, with ongoing corporate expansions and new projects expected to complete by the end of 2025. Business Bay emerged as a leading location for office transactions.
Retail market
The retail sector also showcases resilience, highlighted by the opening of new malls and increased foot traffic. Emaar’s mall operations reported revenues of AED1.5 billion in Q1 2025, with a 98 percent occupancy rate. Strategic partnerships, such as the MoU between Lulu Group and Awqaf Dubai, aim to expand the retail footprint in the city.
Consumer spending continues to rise, supported by strong tourism figures and growing population demands. The retail performance is reflective of the broader economic recovery and consumer confidence in Dubai.
Read more: Dubai real estate reports $40.2 billion from 49,606 sales in Q2 2025, up 22 percent
Hospitality market
As of May 2025, Dubai’s hospitality sector reported a total of 127,583 hotel rooms, with an average occupancy rate of 82.9 percent. The Average Daily Rate (ADR) stood at AED620, with revenue per available room (RevPAR) increasing by 7.3 percent year-on-year. New hotel openings, including Atana Hotel and Mandarin Oriental, contribute to the overall growth of the sector.
The report indicates a steady increase in international visitors, with 8.68 million guests in the first five months of 2025, up 6.9 percent annually. This influx supports the hospitality market and enhances Dubai’s reputation as a tourist destination.
Industrial market
The industrial sector continues to thrive, driven by logistics demand. The VPI for industrial properties reached 158.4 points, with logistics warehouses showing annual capital gains of 16.2 percent. Key locations for growth include JAFZA South and Dubai Investment Park. The average rental rates for warehouses increased, reflecting ongoing demand and supply constraints.
“As supply ramps up in the second half of the year, close attention will be needed to monitor its impact on pricing dynamics. Nonetheless, the outlook remains positive across residential, office, and industrial sectors,” commented Haider Tuaima, managing director & head of Research, ValuStrat.
Macro-economic overview
The macro-economic environment remains favorable, with the World Bank projecting a 4.6 percent growth rate for Dubai’s economy in 2025. Non-oil sectors are expected to lead this growth, contributing significantly to the GDP. The population of Dubai rose to approximately 3.97 million, indicating strong demographic trends that support real estate demand.
