Dubai’s residential market showed strong growth in the first quarter of 2025, with apartments continuing to dominate sales activity. According to Savills’ Q1 2025 Dubai Residential Market report, apartment transactions made up 76% of the total, driven by strong demand and a surge in supply.
Robust supply of new apartments
The first quarter saw over 30,000 residential units launched, more than double the volume from the same period last year. Most of these were apartments, with developers responding to a growing appetite for affordable living options. Off-plan sales continued to lead the way, comprising 69% of all transactions.
Rachael Kennerley, Director of Research at Savills, stated, “In Q1 2025, off-plan sales continued as the cornerstone of transaction activity. Developers capitalised on strong market demand, leading to a robust supply of new units.”
Growth in villa and townhouse market
While apartments led overall sales, the villa and townhouse segment also saw a notable rise. Transactions in this segment increased from 18% to 24% compared to the previous quarter, reflecting growing interest in larger homes, especially in areas beyond the city’s core.
Dubai areas gaining traction
Micro-markets along the Al Khail corridor, including Jumeirah Village Circle, Dubailand, Damac Hills 2, The Valley, and Damac Lagoons, accounted for 55% of transaction volumes. These areas have gained popularity as affordability in central Dubai becomes more limited.
Prime market sees steady demand
Dubai’s prime residential market remained strong, particularly among high-net-worth individuals, with over 1,300 units sold for over Dhs10 million in Q1 2025. Villas led prime transactions, capturing 73% of the market share.
Andrew Cummings, Head of Residential Agency at Savills, said, “Demand across the prime residential segment in Dubai has not simply sustained but strengthened. Amid global uncertainties, the world’s wealthy increasingly recognise Dubai’s appeal, and developers are rising to the occasion.”
Outlook remains optimistic
Despite global challenges, Savills remains confident in the long-term outlook for Dubai’s residential market. The city’s stability, competitive regulatory environment, and growing investment flows are expected to support ongoing demand. However, careful management of the development pipeline will be essential to balancing supply and demand.
tanvir@dubainewsweek.com
