Engel & Völkers Middle East has released its Q1 2025 market report, highlighting a standout quarter for Dubai’s real estate sector.
The report reveals robust growth across both residential and commercial markets, with notable performance in key areas like Jumeirah Village Circle, Business Bay, Dubai Marina, Downtown Dubai, and emerging communities like The Valley, Emaar South, and Damac Islands. These areas continue to attract high investor demand, driven by their strategic locations, connectivity, and strong rental yields.
Residential market performance
Sales Increase: Residential property sales grew by 22.4% year-on-year (YOY), with a 29.6% increase in the total value sold.
Demand Drivers: Growth is attributed to strong investor sentiment, rising population figures, and sustained international investment.
Key market segments:
Off-plan Sales: Increased by 23.9%.
Secondary Transactions: Rose by 20.3%, showing robust demand across various price points.
Dominant Property Type: Apartments accounted for 76% of all residential transactions.
Top areas for residential sales
Jumeirah Village Circle: Maintains its lead in both off-plan and resale apartment sales, thanks to attractive pricing and strong rental yields.
Other Key Areas:
Business Bay
Dubai Marina
Downtown Dubai
These areas remain popular for their connectivity and high rental demand.
Villa market
Villa Transactions: Saw an impressive 80.6% increase in transactions YOY.
Transaction Value: Rose by 55.1%, driven by demand in emerging, master-planned communities such as:
The Valley
Emaar South
Damac Islands
Luxury and ultra-luxury segment
High-End Sales: Sales above Dhs 10 million grew by 29% from Q1 2024 and 185% from Q1 2022.
Key Locations: Palm Jumeirah and Palm Jebel Ali accounted for 31% of sales over Dhs 10 million.
Notable Deals:
Dhs 425 million sale of the Marble Palace in Emirates Hills
Dhs 115 million villa in Palm Jumeirah’s EOME community
Fadi Alsalem, Engel & Völkers Private Office Advisor, brokered these significant deals.
High-net-worth destination
Wealth Growth: The number of resident millionaires in Dubai has doubled in the past decade, with the UAE attracting more HNWIs than any other country in 2023 and 2024.
Wealth Figures: Dubai now hosts over 81,000 millionaires, 237 centi-millionaires, and 20 billionaires.
Future Outlook: The number of millionaires in Dubai is set to increase further as global wealth reallocates towards stable, high-performing destinations.
Dubai’s rental market
Population Growth: Over 51,000 new residents moved to Dubai in Q1 2025.
Rent Increases: While overall rents are stabilizing, key areas saw significant year-on-year growth:
Bluewaters (luxury apartments) +14.1%
Dubai Hills Estate (villas and townhouses) +33.8%
Arabian Ranches (villas and townhouses) +20.6%
Commercial real estate
Growth in Commercial Sales:
Office sales up by 40%.
Retail sales rose by 6%.
Office Prices: The average price per sq. ft. increased by 15%, reaching AED 1,676.
Top Commercial Hubs: Business Bay and JLT saw the highest sales for Grade A office space.
Leasing activity
Leasing Growth: The commercial sector saw a 17.6% increase in leasing activity from Q4 2024 to Q1 2025.
Office Rent Growth: Rents for office spaces increased by 23% YOY to Dhs 112 per sq. ft., particularly in prime business districts such as Business Bay, JLT, and Dubai Investments Park.
Retail Market Stability: Retail rents remained stable at Dhs 240 per sq. ft., though increasing demand for Grade A space may push prices upward later this year.
Daniel Hadi, CEO of Engel & Völkers Middle East, stated:“In the face of global economic uncertainty, Dubai’s real estate market continues to show excellent fundamentals, with cross-sector growth and compelling returns for investors.”
Infrastructure developments
Key Announcements:
Acceleration of the Etihad Rail project
Rollout of the Dubai Loop system
Strategic road upgrades in central business zones These developments are expected to further enhance Dubai’s competitive edge in the global market.
Major commercial projects in 2025
Mall of the Emirates Redevelopment: Dhs 5 billion project signals strong confidence in Dubai’s retail and consumer sectors.
Optimistic Outlook: Engel & Völkers remains optimistic about the real estate market for the remainder of 2025, anticipating continued growth in both residential and commercial sectors.
Engel & Völkers’ optimistic 2025 outlook
“From prime residential to commercial real estate, Dubai is increasingly seen as a safe haven for capital and a high-performance market that rewards long-term vision,” added Hadi.
tanvir@dubainewsweek.com
