Shifting Investor and Tenant Preferences Fuel Dubai Realty Boom

Dubai’s real estate market is experiencing a remarkable surge, driven by evolving investor and tenant preferences. According to analysts at Property Finder, this trend is reshaping the city’s property landscape, as both buyers and renters adapt to new market dynamics.

Surge in Transactions and Market Value

February saw an impressive 35% year-on-year increase in real estate transactions, totaling 16,099 deals. The total market value surged by 55%, reaching AED 51.1 billion, highlighting strong demand across the sector.

Growing Demand for Smaller Apartments

A notable trend in the apartment segment is the increasing preference for smaller units. Approximately 71% of buyers are opting for compact living spaces, with 34% choosing one-bedroom apartments and 37% selecting two-bedroom units. Meanwhile, the demand for studios remains stable at 13%.

Prime locations such as Dubai Marina, Downtown Dubai, and Palm Jumeirah continue to dominate buyer searches. Investors prioritize luxury, connectivity, and high rental yields, making these areas highly desirable.

Villa Buyers Prefer Spacious Homes

In contrast, villa buyers show a strong inclination toward larger homes. Around 86% of villa seekers are targeting three-bedroom (39%) or four-bedroom-plus properties (47%), indicating a growing preference for family-oriented living.

Communities such as Dubai Hills Estate, Damac Hills 2, and Al Furjan are experiencing heightened interest due to their well-planned infrastructure, green spaces, and modern amenities.

Tenants Prioritize Convenience and Flexibility

Rental preferences are also shifting, with a significant increase in demand for furnished apartments. Currently, 64% of renters seek furnished units, up from 45% in 2024. This trend is largely driven by expatriates looking for convenient, ready-to-move-in housing.

Studio and one-bedroom apartments remain the top choices for renters, making up 56% of total rental demand. Budget-conscious tenants are prioritizing affordability, particularly in high-demand areas such as Jumeirah Village Circle (JVC), Deira, and Business Bay.

In the villa rental segment, the demand for furnished homes has risen to 42%, compared to 36% the previous year. Despite this increase, unfurnished villas still account for the majority (58%) of rentals. Larger spaces remain a priority, with 80% of renters opting for three-bedroom (41%) or larger villas, particularly in sought-after locations like Jumeirah, Dubai Hills Estate, and Al Furjan.

Off-Plan Market Witnesses Exceptional Growth

Dubai’s off-plan property market is booming, with transaction values soaring by 57% year-on-year to AED 20.5 billion. Key areas fueling this growth include Wadi Al Safa 5 and Al Yufrah 1, where sales have reached AED 2.2 billion and AED 1.4 billion, respectively.

Meanwhile, the ready property market remains resilient, with transactions rising by 27% to 6,997 deals. High-profile properties such as those in Burj Khalifa and Al Yelayiss 1 continue to attract significant investor interest.

Market Insights and Future Outlook

Cherif Sleiman, Chief Revenue Officer at Property Finder, notes that Dubai’s real estate market is maturing, with shifting investor and tenant preferences shaping the city’s property landscape. “The surge in demand for furnished apartments and off-plan investments reflects Dubai’s appeal to global talent and entrepreneurs seeking turnkey solutions. Meanwhile, villa demand highlights the city’s reputation as a family-friendly destination.”

Experts suggest that developers and landlords must adapt to these changing dynamics. Investors are increasingly balancing high-yield opportunities in smaller apartments with luxury villa projects in emerging suburbs. Tenants, on the other hand, value flexibility and cost-effectiveness, making furnished units an attractive option for expatriates and transient professionals.

The future of Dubai’s real estate market looks promising, with sustained demand across various segments. Developers are expected to focus on compact, ready-to-move-in apartments while continuing to cater to the growing demand for spacious, customizable villas.

As Dubai cements its status as a global business hub, favorable regulatory initiatives and streamlined business setups will further enhance the city’s appeal. With a strong pipeline of developments and a well-balanced real estate ecosystem, Dubai remains a top choice for investors and homeowners alike.