UAE Real Estate Market Report 2025 | Growth, Trends & Outlook

The UAE real estate market in FY 2025 demonstrated a rare combination of scale, stability, and structural maturity. Against a backdrop of supportive macroeconomic conditions, controlled inflation, and sustained global investor interest, both Dubai and Abu Dhabi delivered broad-based performance across residential, commercial, retail, hospitality, and industrial segments.

At Reliant Surveyors, our analysis of FY 2025 highlights a market that has moved beyond cyclical volatility and into a phase defined by liquidity, depth, and disciplined expansion.
 

A Supportive Macroeconomic Foundation

Macroeconomic conditions throughout 2025 remained firmly aligned with real estate growth. Dubai’s economy continued to benefit from non-oil diversification, robust tourism flows, and stable energy markets. Inflation remained controlled, reflecting demand-led cost increases rather than structural pressure, which helped sustain purchasing power across both end-users and investors.

Looking ahead, UAE GDP growth projections of over 5% through 2026–27 reinforce confidence in the medium-term outlook. These fundamentals have translated into consistent transaction activity, healthy absorption levels, and resilient pricing across asset classes.

Dubai Residential Market: Scale with Liquidity

Dubai’s residential sector emerged as the standout performer in FY 2025, reinforcing its position as one of the most liquid residential markets globally.

Total residential transactions rose 18% year-on-year to over 206,000 deals, while total transaction value climbed 25% to AED 546.7 billion. Growth was decisively off-plan led, reflecting strong developer confidence, sustained launch activity, and buyer appetite for new supply.

Off-plan transactions accounted for nearly three-quarters of total residential sales, underscoring the market’s continued preference for future-ready assets supported by structured payment plans. Meanwhile, the secondary market maintained stability, providing depth and continuity without driving speculative excess.

Apartments: The Engine of Market Expansion

Apartments remained the backbone of Dubai’s residential growth story. Transaction volumes increased 20% year-on-year, with sales values rising 27%, driven primarily by off-plan absorption.

Price growth of 12.5% and rental growth of 7.0% reflect a market where capital appreciation continues to outpace rental escalation, yet remains balanced and sustainable. This divergence highlights strong investor confidence while preserving end-user affordability.

Villas: Capital Value-Led Performance

Dubai’s villa segment continued to attract strong demand, particularly for new-build homes within master-planned communities. Transaction volumes rose 10% year-on-year, while values increased a robust 23%.

Villa prices recorded 15.2% growth, while rental growth moderated to 1.2%, indicating a capital-value-driven market. Over the longer term, this segment continues to deliver substantial cumulative gains, positioning villas as a strategic asset class for long-term investors rather than yield-focused buyers.

Supply Dynamics: Growth with Phasing Discipline

Residential supply expansion remained measured in 2025, with Dubai’s completed stock reaching approximately 612,000 units. Apartments dominated new completions, accounting for nearly three-quarters of delivered supply.

Looking ahead, the pipeline signals a sharp rise in completions through 2027. This underscores the importance of phasing, absorption, and delivery discipline, areas where market maturity will be tested but is well supported by depth of demand.

Abu Dhabi, by contrast, continued its controlled and balanced supply expansion, reinforcing long-term market stability without overshooting demand.

Abu Dhabi: Broad-Based Strength

Abu Dhabi’s residential market delivered impressive performance across both sales and rentals. Apartment prices surged 34.8%, while rents increased 23.6%, indicating genuine demand strength rather than speculative price movement.

Villa prices and rents also rose in tandem, reflecting a balanced ownership and leasing environment. Unlike Dubai, Abu Dhabi’s growth profile remained evenly distributed across capital values and income returns.

Rental Yields: Compression with Stability

Rental yields in Dubai moderated during 2025 as capital values rose faster than rents. Apartments averaged yields of around 7.0%, while villas softened to approximately 4.6%.

Abu Dhabi yields remained comparatively stable, reflecting a market where price and rental growth progressed in closer alignment. Yield compression, particularly in Dubai, should be viewed as a function of price confidence rather than weakening fundamentals.

Commercial Markets: Tight Supply, Rising Rents

Dubai’s office market continued to strengthen, supported by limited new supply and sustained occupier demand. Average office rents rose 24% year-on-year, reaching approximately AED 211 per sq ft, highlighting landlords’ pricing power amid constrained availability of quality space.

Retail markets delivered equally strong performance, with average rents increasing 35% year-on-year. Limited new supply and improving trading conditions across prime locations sustained upward momentum.

Hospitality: Resilience Backed by Tourism

Dubai’s hospitality sector remained a cornerstone of economic resilience. Visitor numbers reached approximately 17.55 million, while average daily rates increased 7.1% year-on-year to AED 557. Occupancy levels of around 80% reflect effective capacity utilisation and continued global demand for Dubai as a tourism and business destination.

Industrial & Logistics: Structural Demand in Focus

Industrial and logistics assets recorded strong rental growth across key zones, driven by supply chain reconfiguration, e-commerce expansion, and manufacturing activity. Warehouse and labour accommodation segments both reflected sustained demand, positioning industrial real estate as a strategic growth pillar within the broader market.

Outlook: A Market Defined by Maturity

FY 2025 marks a defining chapter for the UAE real estate market. Growth is no longer episodic or speculative; it is broad-based, data-driven, and institutionally aligned.

For investors, developers, and occupiers, the market now offers clarity, scale, and long-term visibility. At Reliant Surveyors, we view this phase as one where insight, valuation discipline, and strategic advisory will play a decisive role in unlocking sustainable value.

As the market evolves, our commitment remains unchanged: delivering independent intelligence, rigorous analysis, and trusted advisory across every real estate cycle.