Dubai Real Estate 2025: Residents Shift from Renting to Buying as Market Surges Beyond $11.5 Billion

Dubai’s property market is undergoing a profound transformation. What was once a city known for transient cycles of renting is now witnessing a decisive shift as more residents choose to buy homes, establishing long-term roots and building equity.

In the first eight months of 2025, secondary market sales surged by 22 percent compared to last year, highlighting a growing confidence among families and professionals who now view Dubai as a permanent base. Rising rental costs, combined with the desire for stability and lifestyle security, are fueling this trend.

Image : Hayat By Dubai South Properties

Families Leading the Demand for Larger Homes

August alone recorded 17,879 property transactions worth AED42.4 billion ($11.55 billion) - a 17 percent increase in volume and a 12 percent rise in value year-on-year. Off-plan sales continue to dominate the market, accounting for nearly three-quarters of all transactions, but the secondary market is also maintaining strong momentum.

Larger family homes are driving this growth. Sales of four-bedroom villas increased by 70 percent, while five-bedroom and larger properties surged by 63 percent compared to the same period last year. This highlights a clear preference for spacious, lifestyle-oriented residences as families look for long-term investments.

Prices on a Strong Upward Path

Dubai’s average property price reached AED1,664 per square foot in August, marking a 16.3 percent annual increase. Villas in prime communities such as Dubai Hills Estate, Victory Heights, and Arabian Ranches have seen particularly strong appreciation, reflecting demand for luxury, family-friendly neighborhoods.

Apartments, too, are recording healthy growth. Popular communities such as Jumeirah Village Triangle and Jumeirah Village Circle saw prices rise by 29.3 percent and 17 percent year-on-year, respectively.

Rental Yields Remain Among the World’s Best

Despite climbing prices, Dubai remains one of the world’s most lucrative investment destinations. Average gross rental yields stood at 6.76 percent in August, with apartments at 7.12 percent and villas at 4.92 percent.

To put this in perspective, yields in Dubai comfortably outperform many global prime markets, including London, New York, and Singapore. This resilience is supported by strong population growth, new company formations, and a limited supply of high-quality rental properties.

Interestingly, leasing volumes declined by 4 percent this year, with large villa leases falling by double digits — clear evidence that many tenants are transitioning into ownership rather than renewing rental contracts.

Dual-Market Momentum: Off-Plan and Resale

Dubai’s real estate strength now lies in its dual momentum:

• Off-plan projects are thriving, fueled by international buyers, competitive developer-backed payment plans, and a wave of new launches.

• Resale market activity is growing, supported by resident buyers leveraging mortgages with 70–80 percent loan-to-value ratios and attractive interest rates averaging 3.9 percent.

This dual dynamic ensures that both investors and end-users continue to find opportunities across the market.

The New Phase of Dubai’s Real Estate Story

The narrative around Dubai property is shifting. No longer defined only by short-term speculation, the market is increasingly about residents choosing to establish roots, buying homes for security, lifestyle, and long-term wealth creation.

As 2025 enters its final quarter, both off-plan and secondary sales are expected to maintain strong momentum, powered by global investment flows and local demand for ownership.

Dubai’s real estate market is not just growing — it is maturing. And this maturity is setting the foundation for the city’s next chapter: one where homeownership defines the future of its communities.