Dubai Plans to Introduce 73,000 New Homes by 2025 Amid Rising Property Sales
Dubai is poised for significant growth in its residential real estate market, with plans to deliver 73,000 new homes by 2025. This expansion is part of a broader strategy that aims to add a total of 300,000 new units by the end of 2028, according to a report from property consultancy Cavendish Maxwell. Despite a slight decline in property sales transactions in the first quarter of 2025 compared to the previous quarter, the market has seen a notable year-on-year increase, indicating a resilient demand for housing in the emirate.
Market Performance and Trends
In the first quarter of 2025, Dubai recorded 42,000 property sales transactions, valued at AED 114.4 billion (approximately $31 billion). While this represents a 10% decrease from the previous quarter, it marks a 23% increase compared to the same period last year. Ronan Arthur, Director and Head of Residential Valuation at Cavendish Maxwell, noted that the property market is on track for a modest annual increase in sales volumes and values. However, he pointed out that prices are beginning to stabilize after a brief dip at the start of the year. The average quarterly price increase for 2023 and 2024 was around 4%, while the first quarter of 2025 saw a more modest rise of 2.8% compared to the last quarter of 2024.
The current market dynamics are influenced by several factors, including a weakened US dollar, strong rental returns, and attractive yields, which continue to draw both local and international investors. Arthur anticipates that this trend will persist throughout the year, bolstered by the ongoing demand for residential properties.
Sales Breakdown and Property Types
Off-plan sales dominated the market, accounting for 70% of total transactions, which amounted to AED 77.5 billion from 29,000 deals—a 32% increase year-on-year. The secondary market also showed growth, with 13,200 transactions reflecting a 6.6% annual increase. Apartments made up 75% of all transactions, although there was a notable rise in interest for larger homes. Townhouses represented nearly 17% of sales, while villas accounted for just over 7%.
As of the first quarter of 2025, average property prices reached AED 1,535 per square foot, marking a 2.8% increase from the previous quarter and a 16% rise compared to the same period in 2024. The luxury segment of the market saw a significant uptick, with 590 property sales priced above AED 20 million, an increase from 480 sales in the same timeframe last year. Notably, off-plan sales constituted 67% of luxury transactions, highlighting a strong preference for new developments among high-end buyers.
Future Developments and Rental Trends
Looking ahead, a surge in property completions is expected in 2026 and 2027, with over 180,000 units scheduled for delivery. In the first quarter of 2025, Jumeirah Village Circle (JVC) led the market with 4,330 new units completed, also recording the highest number of apartment transactions at 3,330. Other notable areas included Mohammed Bin Rashid City, Business Bay, and Downtown Jebel Ali, each contributing to the growing inventory.
From January to March, apartments accounted for nearly 80% of all completions, with 95 projects launched, delivering around 28,600 new units. The demand for villas and townhouses remained strong, with DAMAC Islands leading off-plan sales in this segment. However, rental growth has shown signs of slowing, with residential rents rising 14.4% annually but only 1% compared to the previous quarter, marking the slowest quarterly increase in two years. This trend may be influenced by the influx of new units and the introduction of the Dubai Smart Rental Index, which is expected to shape tenant expectations and pricing strategies.
Investment Yields and Market Outlook
As of March 2025, rental yields averaged 7.3% for apartments and 5% for villas and townhouses. Dubai Investments Park offered the highest yields for apartments at 10.3%, followed by International City and Downtown Jebel Ali. For villas and townhouses, Industrial City led with yields of 6%, indicating strong investment potential in various areas of the emirate.
The ongoing developments and market adjustments suggest that Dubai’s real estate sector remains attractive to investors. With a growing inventory and evolving rental dynamics, stakeholders will need to monitor trends closely to navigate the changing landscape effectively.
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