Dubai’s real estate sector is expected to maintain strong momentum in 2025, supported by booming tourism, steady investor demand, and rapid urban expansion. However, as new housing deliveries rise, analysts anticipate a shift toward higher quality, better-located, and more sustainable assets.
According to Elite Merit Real Estate, the city’s tourism-driven growth and strong off-plan sales underline Dubai’s continued global appeal, but the expanding supply will introduce new market dynamics.
Record Tourism Boosts Property Demand
Dubai welcomed 9.88 million visitors in the first half of 2025—a 6% year-on-year increase—with an average hotel occupancy of 80.6%. This record inflow is fueling the demand for short-term rentals and serviced apartments.
Average property prices climbed 3.7% quarter-on-quarter to AED 1,749 per square foot. Off-plan deals accounted for nearly 70% of total transactions in Q1 2025, showing a clear investor preference for early-stage projects.
Luxury Segment Reaches New Heights
The luxury property sector continues to set records. In Q2 2025 alone, Dubai saw $2.6 billion in transactions for homes valued above $10 million, marking an all-time high for the ultra-luxury market.
Knight Frank projects 70,452 new units will be handed over in 2025, followed by another 133,041 in 2026. While this rapid expansion may lead to a moderate 10–15% correction, it also opens opportunities—especially in the mid-market segment.
Quality and Brand Drive Value
Experts emphasize that premium properties will retain their value thanks to limited supply and strong international demand. Developers with strong financial discipline, phased delivery schedules, and transparent escrow management are best positioned for stability.
The “flight-to-quality” trend will accelerate, making brand reputation, location, and ESG compliance key factors in property valuation.
Branded Residences and Mixed-Use Growth
Dubai’s branded residence segment now includes around 140 projects, consistently outperforming the wider market. These developments attract high-net-worth foreign buyers seeking secure, long-term value.
Meanwhile, mixed-use projects combining office, retail, and residential spaces continue to thrive. With office vacancy rates as low as 7.7%, these developments offer resilience and consistent rental income.
Key Developments Reshaping Dubai
Several mega-projects are redefining the city’s landscape. The relaunch of Palm Jebel Ali will add 13.4 km of new coastline, while Expo Valley’s 532-unit first phase begins handovers in early 2026. Expo City is further boosting Dubai’s global reputation, attracting a growing base of European investors.
The Road Ahead
Although rising supply may pressure the mid-market and affect affordability, high-end segments are expected to remain robust due to Golden Visa incentives, limited land availability, and rising foreign interest.
Elite Merit Real Estate concludes that the next market cycle will reward projects that are branded, sustainable, and strategically located—marking a new era in Dubai’s real estate evolution.
