Dubai’s Residential Property Market Sees Slowest Growth in 20 Months

Dubai’s real estate market witnessed a slowdown in price growth for residential properties in February 2025, marking the slowest increase in the past 20 months. The trend is attributed to an increase in property deliveries and a maturing market, as revealed by data released on Monday.

The ValuStrat Price Index (VPI), a key market indicator, reflected a decline in capital growth rates compared to previous months. The data showed that villa valuations rose by 2 per cent monthly, a decrease from their peak increase of 2.7 per cent. Similarly, apartment prices saw a 1.2 per cent monthly rise, dropping from a previous high of 2 per cent. The slowdown suggests that while property values continue to appreciate, the pace of growth has begun to stabilize.

The VPI, which benchmarks property prices based on a representative sample covering over 90 per cent of Dubai’s residential and commercial property markets, recorded a value of 207.5 points in February 2025. This represented a 1.6 per cent increase from January and a significant 26.5 per cent rise compared to the same month last year.

Villa Market Performance

The capital value of villas continued to rise, reaching 269.6 points, based on the VPI's index baseline of 100 points in January 2021. Monthly villa prices grew by 2 per cent, while the annual growth rate stood at an impressive 30.8 per cent. Certain locations outperformed others, with Jumeirah Islands leading with a 42.3 per cent annual increase. Palm Jumeirah followed closely at 41.8 per cent, while Emirates Hills and The Meadows recorded annual growth rates of 31.2 per cent and 29.9 per cent, respectively.

On the other hand, Mudon reported the lowest annual growth among villa communities, registering a 10.5 per cent increase. This marks the sixth consecutive month in which villa prices in Mudon have remained relatively stable. Overall, Dubai’s freehold villa prices have soared, now valued 57 per cent above the previous market peak and 160 per cent higher than post-pandemic levels.

Apartment Market Performance

The apartment segment also experienced a rise in property values, though at a slower rate than villas. In February, apartment prices increased by 1.2 per cent compared to the previous month, a slight decline from the 1.4 per cent growth recorded in January. Annually, apartment prices surged by 22.2 per cent.

Some of the highest capital gains in the apartment segment were observed in The Greens, which recorded a 28.9 per cent increase in annual values. Other high-performing locations included Palm Jumeirah (26.3 per cent), Dubailand Residence Complex (25.7 per cent), The Views (25.4 per cent), and Town Square (25.1 per cent).

On the lower end of the spectrum, International City and Dubai Sports City recorded annual increases of 15.4 per cent and 17.9 per cent, respectively. Despite the overall positive trend, apartment prices remain, on average, 9 per cent below their previous peak but are now 65 per cent higher than their post-pandemic valuations.

Off-Plan vs. Ready Homes

Dubai’s real estate market continues to see a strong preference for off-plan properties. February 2025 saw Oqood (contract) registrations for off-plan homes surge by 22.2 per cent on a monthly basis and 59.5 per cent year over year. Off-plan transactions accounted for a dominant 70.8 per cent of all home sales during the month.

The market for ready secondary homes also experienced growth, with transactions increasing by 12.8 per cent month-on-month and 9.8 per cent on an annual basis. Notably, the luxury segment remained active, with 31 high-end transactions recorded for properties priced above AED 30 million. These sales were concentrated in premium locations such as Dubai Hills Estate, Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, Business Bay, Bluewaters Island, District One, and Jumeirah Golf Estates.

Top Developers and Locations for Transactions

Dubai’s leading developers continued to dominate sales, with Emaar topping the charts at 17.5 per cent of total developer transactions. Other prominent developers included Damac (12.7 per cent), Sobha (4.8 per cent), Nakheel (4.3 per cent), Dubai Properties (4.3 per cent), and Samana (2.6 per cent).

The most sought-after off-plan locations included Jumeirah Village Circle (7.1 per cent of all off-plan transactions), The Valley (6.5 per cent), Damac Island City (5.5 per cent), Emaar South (5 per cent), and Dubailand Residence Complex (4.9 per cent). A record-breaking number of off-plan homes were traded in Dubai Silicon Oasis, making it a standout performer for the month.

When it came to ready homes, Jumeirah Village Circle led the market with 9.9 per cent of transactions. Other key locations included Business Bay (7.4 per cent), International City (5.6 per cent), Dubai Marina (5.4 per cent), Downtown Dubai (5.2 per cent), and Jumeirah Lake Towers (3.3 per cent). Emirates Hills also achieved a record-breaking number of transactions for ready homes, underscoring the sustained demand for luxury properties in established communities.

Market Outlook

The overall trend in Dubai’s residential property market suggests a gradual stabilization after an extended period of rapid growth. While property values continue to rise, the pace of appreciation has begun to decelerate, reflecting a maturing real estate sector with increasing supply.

Industry experts predict that while price growth may moderate further in the coming months, Dubai’s property market will remain attractive due to its strong economic fundamentals, continued infrastructure development, and investor-friendly regulations. The demand for high-end villas and premium apartments is expected to stay robust, particularly in sought-after locations such as Palm Jumeirah, Emirates Hills, and Dubai Marina.

Additionally, with off-plan properties accounting for a significant portion of total transactions, developers are likely to continue launching new projects to cater to both end-users and investors. As supply catches up with demand, price stability is anticipated, benefiting buyers looking for long-term investments in Dubai’s thriving real estate market.

As the market continues to evolve, prospective buyers and investors should remain informed about changing trends and emerging opportunities to make strategic decisions in Dubai’s dynamic property landscape.