Dubai’s property market kicked off 2025 with its first price decline in over two years, signaling a potential shift in the landscape. While demand remains strong, affordability constraints and stabilizing transaction volumes suggest that the market is entering a new phase—one focused on sustainability rather than rapid appreciation.
Price Growth Slows After a Four-Year Run
For the first time since mid-2022, property prices dipped, falling 0.57% in January to AED 1,484 per square foot. While this marks a shift from the aggressive growth seen in recent years, prices still remain 20.3% above the 2014 peak. The slowdown follows months of decelerating price appreciation, indicating that the market may be reaching a plateau.
Transaction Volumes Dip, But January Sets a Record
Sales transactions fell 4.6% month-on-month to 14,413 deals in January, yet it still stands as the strongest January on record. While the overall market remains active, recent declines in transaction volumes suggest that activity is normalizing after the peak levels seen in late 2024.
Off-Plan Market Shows No Signs of Slowing
Despite a decline in off-plan transaction volumes, 53 new project launches introduced over 12,400 units in January, continuing the rapid expansion of this segment. Off-plan accounted for 52.4% of total transactions, though after adjustments, its market share rises to 67.6%, reflecting strong investor confidence. With over 250 projects in the pipeline, off-plan activity is expected to remain a dominant force in the market throughout 2025.
Mortgage Market Sees Uptick Amid Regulatory Changes
Mortgage transactions increased 6.8% month-on-month, with 4,134 loans recorded. Notably, purchase money mortgages made up 41.9% of activity, while refinancing and equity release loans gained market share. Although UAE Central Bank regulations are tightening, loan-to-value (LTV) ratios remain steady, though affordability challenges may impact borrowing power in the coming months.
What’s Next for Dubai Real Estate?
Dubai’s property market remains fundamentally strong, backed by government initiatives such as the Dubai Economic Agenda (D33) and the Real Estate Sector Strategy 2033. However, the market is shifting toward measured stability, where liquidity and strategic development take priority over rapid price gains. Affordability concerns in the ready market and the impact of regulatory changes will be key factors to watch in the coming months.
📊 All statistics are provided by Property Monitor—the region’s leading real estate intelligence platform.
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