The Dubai real estate market has kicked off 2025 with remarkable momentum, showcasing unprecedented growth in property transactions. As increasing buyer confidence drives demand, the primary market has witnessed a significant surge, indicating a bright outlook for the rest of the year.

Record Growth in Property Transactions

According to Property Finder, a leading property portal in the MENA region, Dubai’s property market experienced an astonishing 63% year-on-year increase in total transaction values, amounting to AED 72.4 billion. This represents a historic high for the emirate, largely propelled by a remarkable 90% growth in the primary market alongside a 38% rise in secondary market values. Additionally, total transaction volumes saw a year-on-year increase of 23%, mainly attributed to a 42% rise in primary transaction volumes, even as secondary volumes experienced a slight decline.

Rising Demand for Off-Plan Properties

January has shown a considerable uptick in off-plan property demand, with valuations escalating by 128% year-on-year. This contrasts with a lesser yet significant 49% increase in ready property values. Although the secondary market demonstrated consistency, reporting a 38% increase in values, it did experience a 9% downturn in off-plan transactions. The soaring demand for off-plan properties indicates a robust confidence among investors and end-users in Dubai’s upcoming high-quality projects.

The secondary market, representing a substantial portion of the total property landscape, has remained resilient despite a marginal decline in transaction volumes. With ready properties accounting for nearly 89% of total value, the secondary market continues to be strong, marked by a 48% rise in transaction volumes for ready units. Conversely, the off-plan secondary segment experienced a cooling trend, with values declining by 9% alongside a 27% drop in volumes year-on-year.

Consumer Preferences and Demographics

The demand for apartment living persists as renters and buyers increasingly favor practical and affordable housing options. According to recent statistics, apartments comprised 78% of rental searches in January, while 59% of buyers sought apartments, highlighting a continued preference for compact living spaces. Among apartment hunters, approximately 70% were interested in one- and two-bedroom units, reflecting a shift toward budget-friendly options driven by rising rental prices.

The demographic profile of buyers also illustrates evolving market confidence. In January alone, new inquiries surged over 25% compared to December, indicating heightened buyer engagement, particularly from those in the mid-to-high income brackets. Notably, over two-thirds of inquiries came from individuals earning above AED 40,000 monthly, emphasizing the sustained demand for premium properties such as villas and townhouses. Interestingly, apartments dominated the entry point into the Dubai property market for those earning less than AED 40,000 per month.

A Resilient Mortgage Market

Dubai’s mortgage market showcases commendable vitality, with values and volumes increasing by 30% year-on-year. This upward trend is supported by improved affordability, as the average three-month EIBOR dropped from 4.0% to 3.5%, thus enhancing borrowing capabilities. The anticipated number of property handovers throughout the year is expected to further invigorate this market, with a positive outlook fueled by resilient end-user demand and favorable interest rates allowing buyers to access higher-value properties.

In summary, January marks an impressive start to 2025 for Dubai’s real estate market, illustrated by robust transaction values and heightened consumer engagement. The prevalent demand for off-plan properties, coupled with the sustained popularity of apartment living, reveals a market that is not just enduring but thriving, making it an attractive landscape for investors and home seekers alike.