Real estate sales in Dubai reached record highs in Q2 2025, despite a deceleration in price growth and growing affordability pressures. The ValuStrat Price Index (VPI) rose 4.7 percent in Q2, a slower pace compared to 5 percent in Q1 and 6.4 percent in the same quarter last year.
On an annual basis, the index grew 23.9 percent to reach 220.8 points, benchmarked against a base of 100 points set in Q1 2021.
“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,” said Haider Tuaima, managing director and head of real estate research, ValuStrat.
Villa prices surge 180.1 percent since 2021
In its latest quarterly review, ValuStrat revealed that over the past four years, apartment communities in Dubai have seen an average capital value increase of 73.3 percent, with standout gains in Palm Jumeirah at 140.5 percent and The Greens at 104.1 percent, both more than doubling in value.
Villa valuations in Dubai’s real estate market have risen even more sharply, up 180.1 percent on average since 2021. Notably, four villa communities more than tripled in value, including Jumeirah Islands, Palm Jumeirah, and Arabian Ranches.
In Q2 2025, villa capital gains slowed slightly, with the ValuStrat Index reaching 291.6 points, marking a 28.7 percent annual and 6 percent quarterly increase. The highest quarterly growth was seen in Jumeirah Islands and Palm Jumeirah, followed by Emirates Hills and The Meadows, while Mudon posted the lowest gain at 2.1 percent.
Apartment values also rose at a slower pace, recording a 19.1 percent annual and 3.4 percent quarterly increase, reaching 174.7 points on the ValuStrat Price Index. The strongest quarterly capital gains were observed in Remraam, Dubai Silicon Oasis, Town Square, The Greens, Dubailand Residence Complex and Palm Jumeirah. In contrast, International City and Dubai Marina saw the most modest growth.
Dubai’s premium apartment prices rise 19.9 percent
The report also revealed that the valuation index for prime residential properties reached a new all-time high of 231.6 points in Q2 2025. This represents more than twofold increase from the baseline of 100 points established in Q1 2021.
While the pace of growth has moderated slightly, Dubai’s prime real estate market remains robust. Prime property valuations rose by 25.7 percent annually and 4.9 percent quarterly, marking the lowest quarterly capital gains in 21 months, yet still indicative of resilient buyer appetite in the upper end of the market.
The prime villa segment, however, led performance, advancing to 303.6 points. Annual capital gains stood at 32.1 percent, with a 6.6 percent increase over the previous quarter. Notably, all tracked villa communities in the prime segment have at least doubled, and in many cases tripled, in value since the onset of the pandemic.
Meanwhile, Dubai’s premium apartments continued to appreciate, albeit at a more measured pace compared to villas. The segment recorded a 19.9 percent annual increase and a 3.3 percent quarterly rise, reaching 187.5 points.
Rental values rise 6.2 percent annually
The report also revealed that the ValuStrat Price Index (VPI) for Dubai’s residential rental values rose modestly by 1 percent quarter-on-quarter and 6.2 percent year-on-year, reaching 200.3 points. The VPI for apartments rose to 188 points, whilst the VPI for villas climbed to 220 points, more than double the baseline of 100 points set in Q1 2021.
Villa asking rentals in Dubai’s real estate market remained stable quarterly but were up 4.8 percent annually, bringing the average yearly rent to AED 428,000. Meanwhile, apartment asking rents increased by 1.2 percent quarterly and 7.2 percent yearly, reaching an average annual rent of AED95,500.
Average annual asking rents for apartments stood at AED64,000 for studios, AED91,000 for one-bedroom units, AED131,000 for two-bedroom units, and AED191,000 for three-bedroom units. Meanwhile, average annual rents for villas were AED335,000 for three-bedroom units, AED426,000 for four-bedrooms and AED522,000 for five-bedroom homes.
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66,596 new homes set for delivery in 2025
The quarter marked a significant milestone with nearly 37,000 off-plan transactions, averaging over AED3.1 million per unit. Ready home sales also saw a 10.4 percent quarterly increase, driven by robust activity in April and May, reaching a record 13,700 title deed registrations, with an average price of AED2.7 million.
The estimated number of new homes scheduled for delivery in 2025 has been revised to 66,596 units, 65 percent being apartments and 35 percent villas and townhouses. The first half of the year saw appropriately 17,500 homes completed, equivalent to less than a third of the annual forecast.
The report also revealed that 158,854 apartments and 40,173 villas and townhouses are actively under construction in Dubai’s real estate market with handovers promised by 2029. Of these projects, 11 percent are located in Jumeirah Village Circle, with another 7 percent located in Business Bay followed by Damac Lagoons and Jumeirah Lake Towers with 5 percent each.
