UAE Q3 Real Estate Market Review 2025: Economic Growth Fuels Demand as Supply Stays Tight

Dubai, United Arab Emirates - The UAE’s property market continues its powerful run through 2025, supported by strong economic fundamentals, sustained foreign investment, and limited supply across key sectors. CBRE Middle East’s UAE Real Estate Market Review Q3 2025 highlights how the nation’s diversified growth strategy and investor confidence are driving record performance across residential, commercial, hospitality, and industrial markets.

Economic Momentum Remains Strong

The UAE economy continues to expand at a healthy pace, powered by a thriving non-oil sector, higher oil production quotas, and rising foreign direct investment (FDI).The country’s GDP growth forecast for 2025 stands at 4.9%, while non-oil sectors - including tourism, trade, and logistics - are projected to grow by 4.6% this year and 4.3% in 2026.

Tourism remains a standout contributor, with both Dubai and Abu Dhabi reporting record visitor numbers. The UAE’s Purchasing Managers’ Index (PMI) climbed to 54.2 in September, reflecting continued business expansion and reaffirming the country’s status as one of the world’s most stable and opportunity-rich economies.

Commercial Markets: Undersupply Driving Rent Growth

Dubai’s office market continues to face a supply crunch, with average occupancy rates at 94% and rents up 19% year-on-year. Demand in key business hubs such as DIFC, Dubai Design District (d3), and DMCC remains exceptionally strong, prompting many occupiers to pre-lease upcoming developments earlier than usual.

In Abu Dhabi, the growth of ADGM (Abu Dhabi Global Market) has fueled demand for Grade A office spaces, especially on Al Maryah Island, where rents have risen 8% year-on-year and prime offices command premium rates. Limited availability has also pushed occupancy rates higher on Reem Island, now a favored alternative for many ADGM-linked businesses.

Residential: Demand Surges Despite Seasonality

Dubai’s residential sector defied expectations in Q3, registering 56,723 transactions worth AED 139.8 billion — a 16% year-on-year rise. Off-plan sales dominated the market, accounting for 75% of total activity, as investors continue to bet on long-term appreciation and flexible payment plans.

Property prices rose 12.9% annually, with strong growth across key areas such as Dubai Silicon Oasis and DIFC.In Abu Dhabi, residential transactions reached a record 6,610 (+79% y-o-y), while prices and rents jumped over 25%, reflecting a shortage of quality supply and strong end-user demand.

Hospitality: Tourism Boom Lifts Revenues

The UAE’s hospitality market continues to shine, with 27.6 million international visitors expected in 2025. Both Dubai and Abu Dhabi achieved 79% year-to-date occupancy, while RevPAR (Revenue per Available Room) rose 12% annually.

Abu Dhabi’s hotel revenues grew 19% to AED 4.8 billion, driven by global events and long-stay visitors, while Ras Al Khaimah reported a 9% increase in hospitality revenues. These metrics reinforce the UAE’s position as a top global tourism destination and a resilient hospitality investment market.

Retail and Industrial: Strong Fundamentals, Tight Supply

Retail performance remains steady, with prime occupancy rates at 97% in Dubai and 95% in Abu Dhabi. Rents increased 5.3% and 3.3% respectively, supported by population growth, tourism, and high-end brand entries — including new openings like Skims and Ulta at Mall of the Emirates.

Meanwhile, the industrial sector continues its strong expansion, underpinned by limited stock and rising logistics demand. Average industrial rents are up 18% in Dubai and 12% in Abu Dhabi, with multiple large-scale projects scheduled for completion starting 2026.

Market Outlook

According to Matthew Green, Head of Research for CBRE MENA:

“The residential development pipeline continues to grow, with rising deliveries starting to soften rental market dynamics in select areas. However, commercial markets remain heavily supply constrained, and without significant new completions until at least 2027, the current landlord-friendly environment is likely to persist.”

Tavian Properties’ Takeaway

For investors and end-users alike, the UAE continues to present a rare balance of economic resilience, safety, and long-term growth potential. Dubai and Abu Dhabi’s undersupplied premium segments, alongside sustained global demand, are likely to keep driving capital appreciation and rental yield opportunities well into 2026 and beyond.

At Tavian Properties, we believe that the next 12–18 months will continue to favor strategic acquisitions in prime off-plan developments and commercial

source : Zawya