The Dubai Real Estate Market Q2 2025

The Dubai Real Estate Market Q2 2025

With 53,078 transactions totalling AED 184 billion, Dubai’s property market has evolved from a high-net-worth haven into a strategic asset class for institutional investors, driven by strong global interest and the Depreciation Allowance for Investment Properties.

What is Ahead for Dubai’s Sales Market?

‍Our latest report reveals record transaction volumes but signals a slowdown in price growth, pointing to rising affordability pressures and potential oversupply. Fitch forecasts a moderate correction by mid-2025, while others remain more optimistic. Core districts are expected to hold strong, backed by resilient demand and prudent lending.

Ownership Shift Reshaping Dubai’s Rental Market

Rental contract activity fell by 6% year on year in Q2 2025, suggesting a slowdown in new tenant demand, even as property sales volumes continued to climb. With affordability concerns growing and a large wave of new supply expected, Dubai’s real estate market is showing early signs of divergence. Source: Property Monitor

On a quarterly basis, total rental contracts fell 12.9%, driven primarily by a sharp 20.4% drop in renewals. In contrast, new contract activity rose by 4.2%, indicating fresh leasing demand remains resilient potentially supported by relocation trends, new project handovers, or seasonality.

The spike in residential sales is not just a headline figure it’s a market signal. As more residents shift from renting to ownership, particularly in mid-market and emerging freehold zones, rental demand could fragment, especially in areas where value-conscious buyers are transitioning into ownership. Landlords may need to adjust expectations in the face of a more empowered tenant base, particularly as mortgage affordability and new supply increase. Meanwhile, tenants who continue to rent will likely seek more flexibility, value, and service making professional property management and tenant experience critical differentiators.

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