By Ozan Demir – Director – Operations and Research at REIDIN – Real Estate Information

Dubai’s residential market closed 2025 at an exceptional point in the cycle, with activity levels reaching historic highs across transactions, values, and new launches. Total residential transactions reached 206,101 deals, representing an 18% year-on-year increase and the highest annual volume on record. Transaction value rose to AED 547 billion, up 25% YoY, reflecting both higher volumes and sustained price appreciation across most segments.

Transaction growth over the past cycle has broadly moved in line with population expansion and household formation, reinforcing that demand has been underpinned by real occupancy needs rather than purely speculative turnover. Between 2021 and 2025, residential transaction volumes expanded by approximately 265%, illustrating the scale of demand recovery and structural deepening of the market.

A clear correlation is evident between transaction volumes and new launches. In 2025 alone, approximately 150,500 residential units were launched across 575 projects, with apartments accounting for nearly 87% of supply. This translated directly into off-plan sales dominance, with 148,391 off-plan transactions, representing a 25% YoY increaseand more than 70% of total market activity. By contrast, ready transactions grew at a more measured 4% YoY, highlighting the divergent pace between forward-funded demand and completed stock.

Price dynamics have broadly followed transaction intensity, particularly within the sales market. City-wide average apartment prices increased to approximately AED 1,853 per sq. ft. in 2025, while villa prices reached AED 2,331 per sq. ft., reflecting 14% YoY growth for apartments and 17% for villas. However, price growth has already begun to moderate relative to transaction momentum. Rental growth slowed to 9% YoY for apartments and 6% for villas, indicating that improving supply delivery and affordability constraints are starting to rebalance market conditions.

Looking ahead to 2026 and 2027, the market narrative shifts meaningfully. While the current cycle has been driven primarily by off-plan activity, future performance will increasingly depend on job creation translating into sustained population growth and end-user absorption. Importantly, a substantial volume of supply launched between 2023 and 2025is scheduled for delivery over the next two years. Around 397,000 residential units are expected to be completed through 2028, with nearly 70% concentrated in 2026–2027, introducing a clear inflection point for supply dynamics.

This upcoming delivery wave is expected to place pressure on price growth, particularly in high-volume apartment corridors where competing projects overlap. However, this should not be interpreted as a uniform market correction. Delivery remains geographically concentrated, developers retain flexibility in phasing, and demand depth varies materially by location and price band.

Unlike the off-plan market, the ready residential segment has expanded steadily at lower growth rates, broadly aligned with population increases. Mortgage-supported transactions reached approximately 42,900 deals in 2025, more than doubling since 2021, reinforcing the role of end-user demand as a stabilising force. When viewed against household formation assumptions of roughly four persons per household, completed supply absorption remains broadly balanced.

While some market commentators express concerns around a renewed supply-led downturn, the data points toward normalisation rather than oversupply. The next phase of the cycle will be defined less by headline launch volumes and more by execution quality, pricing discipline, and the ability of locations to absorb delivered stock. As Dubai moves into 2026–2027, differentiation across assets and communities will widen, with demand-led, livable, and well-located projects outperforming purely volume-driven supply.