Dubai concluded 2025 with an exceptional performance in its residential market, achieving record highs that caught the attention of global investors. However, the dynamics behind these impressive statistics reveal a deeper shift within the property landscape. Based on insights from the Betterhomes Dubai Residential Market Report for FY 2025, we address key inquiries from investors and institutions regarding the current state of Dubai’s real estate market.

Why is Dubai’s Market Resilient Amid Global Slowdowns?

Unlike many global real estate markets that experience cyclical fluctuations, Dubai’s demand is fundamentally structural. Throughout 2025, the market demonstrated a steady activity level, culminating in 203,000 transactions valued at AED 547 billion. Notably, Q4 alone contributed AED 141 billion, highlighting a stable market foundation rather than a transient spike. This broad-based demand, cutting across various price ranges and property types, underscores the resilience and strength of Dubai’s real estate sector.

Which Properties Offer the Best Liquidity?

Liquidity within the market continues to gravitate towards smaller homes. In fact, studios, one-bedroom, and two-bedroom units constituted a remarkable 77% of all transactions. Furthermore, 72% of these deals occurred within the AED 500,000 to AED 3 million range, indicating a robust demand for properties that are easily rented out, financed, and resold. This trend ensures that these segments remain pivotal for market activity and turnover.

Does Off-Plan Sales Dominance Signal Risks?

Presently, the prominence of off-plan sales does not represent a risk. In 2025, there were 132,000 off-plan transactions totaling AED 286 billion. In contrast, the secondary market thrived as well, generating AED 262 billion through 71,000 transactions. This dual-track market demonstrates a balanced landscape where strong resale activity pairs well with off-plan absorption, thereby minimizing risks typically associated with over-reliance on new projects.

Are Property Prices Still Climbing?

While property prices continue to rise, the pace has moderated significantly. Average values saw a 12% year-on-year increase, reaching AED 1,673 per square foot. This transition from rapid increases to a more tempered rise indicates that the market is stabilizing rather than facing a price correction. Such moderation is beneficial, aligning rent levels, income flows, and financing conditions in a more sustainable manner.

What Does Increased Mortgage Activity Indicate?

The resurgence of mortgage-backed transactions—accounting for 52% of all deals in 2025—reflects a growing confidence among buyers. This shift indicates a movement towards long-term investment strategies as buyers prefer to hold properties through varying market conditions rather than seek short-term gains. Such trends signal increased participation from end-users who are committed to the market’s evolution.

In summary, the Dubai residential market, as detailed in the Betterhomes report, has transitioned into a phase characterized by selective opportunities and yield-focused strategies. With more controlled price growth and a commitment to quality and location, investors are encouraged to approach this dynamic market with a discerning eye. As the landscape evolves, being informed and strategic will be crucial for capitalizing on the potential returns Dubai has to offer.