Dubai property market to peak in 2025? 

The property cycle in Dubai is nearing its peak, and prices in some segments are likely to stabilise this year, according to real estate consultancy ValuStrat. However, many industry executives foresee the real estate market maintaining good growth in 2025 due to sustained demand and the gap between supply and demand.
"With Dubai's property cycle potentially approaching its peak, investors are advised to closely track market trends, particularly in high-end villa locations," said real estate consultancy ValuStrat in its annual report. It projected that larger villas in prime locations will likely experience slower sales price growth, with potential price stabilisation in the latter half of 2025.
Going forward, ValuStrat sees Dubai's residential market maintaining its upward trajectory in 2025, though at a slower pace, supported by economic growth, rising demand, positive sentiment, and increasing market maturity.
“Overall market growth is projected to moderate, with capital values increasing by 5-10 per cent during the year, reflecting a more subdued performance compared to 2024,” said the consultancy in its annual report.
Abdullah Alajaji, managing director, Driven Properties, said sustained demand in luxury and off-plan properties witnessed last year will persist into 2025. “The growing interest in off-plan properties indicates strong investor confidence in future developments,” he said.
Mark Richards, CEO of The Network, added that Dubai’s real estate market is set for a strong performance in 2025, driven by sustained demand and limited supply in key segments.
Ready property demand rising
ValuStrat added that the ready-to-move-in property demand grew in 2024 as more tenants turned to ownership due to high rentals as well as a drop in mortgage rates.

Demand for affordable units also grew last year as consistent surges in prices made properties beyond the reach of some residents and investors with off-plan continued to dominate the market.
“Ready-to-move-in home sales grew by 12.3-per-cent, while off-plan sales surged by 76.4 per cent compared to 2023… A clear shift towards affordable apartments emerged, with two out of five ready sales involving units priced below D1 million. This trend was driven by tenants opting to become homeowners, supported by reduced borrowing costs following three federal fund rate cuts in the latter half of the year,” said Haider Tuaima, director and head of real estate research at ValuStrat.

Abdullah Alajaji, managing director, Driven Properties, said demand for affordable housing has been increasing as rents continue to rise in 2024.
“There was also a noticeable shift toward smaller units in terms of size, which has been a defining characteristic of the market. We observed sustained demand in both the luxury property and off-plan markets, trends that we believe will persist into 2025. The growing interest in off-plan properties indicates strong investor confidence in future developments, a positive sign for the market in the coming year.”
By the end of 2024, apartment asking rents grew at twice the rate of villas, as some villa communities began reaching price ceilings, said the real estate consultancy, he said.
In addition, multiple rate cuts by the Central Bank of the UAE prompted more residents to turn to ownership amidst cheaper mortgage rates.