Image credit: DAMAC Islands/Website
Dubai’s residential real estate market is undergoing a notable transformation in 2025, with shifting buyer preferences, robust rental yields, and strategic new developments shaping activity across the emirate. While apartments remain the most transacted asset class, emerging trends point to growing interest in suburban communities, larger properties, and value-oriented investment zones.
Backed by government support, improved infrastructure, and evolving buyer demographics, several key residential hubs have recorded strong momentum in the first quarter of the year.
Among Dubai’s top six residential communities—Jumeirah Village Circle (JVC), DAMAC Island, Downtown Dubai, Meydan City, Dubai Marina, and Dubai South—transaction volumes have been rising steadily. This growth is supported by competitive pricing, enhanced infrastructure, and attractive rental yields.
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DAMAC Island, the most affordable among the six, reported an average price of Dhs823 per square foot and a robust rental yield of 7.38 per cent. These figures are largely driven by off-plan pricing advantages and high-return opportunities for early investors.
Dubai South followed with average prices of Dhs1,035 per square foot and rental yields of 6.77 per cent, while JVC saw average rates of Dhs1,238 per square foot, offering a strong return of 7.39 per cent. JVC remains a favourite among first-time buyers and younger tenants due to its affordability and accessibility.
Dubai Marina, located in a more central zone, recorded average prices of Dhs1,757 per square foot, with yields close to 6.24 per cent. Downtown Dubai, with its premium location and iconic skyline, commanded the highest average rate at Dhs2,504 per square foot, delivering a solid 6 per cent return.
In contrast, Meydan City emerged as a value-driven alternative, with an average of Dhs 1,915 per square foot and yields of 7.14 per cent, supported by ongoing infrastructure improvements and larger apartment layouts.
Zone 6 leads in activity and launches
Zone 6, which encompasses several emerging micro-markets along the Al Khail corridor, recorded the highest transaction activity in Q1 2025. It accounted for 55 per cent of total residential transactions and 56 per cent of newly launched units.
This zone includes areas such as JVC, Dubailand, DAMAC Hills 2, The Valley, and DAMAC Lagoons, where land availability is more abundant compared to central locations like Business Bay and Downtown Dubai.
A Savills research report highlighted major project launches in Zone 6, including:
- The Wilds by Aldar in Dubailand
- Sobha Solis in Motor City
- Samana Resorts in Dubai Production City
- Ellison & Baltimore by Nshama in Town Square
These projects offer a mix of price points and product types, catering to a wide demographic of buyers and investors.
Shift toward suburban growth
The rise of suburban communities is being driven by evolving urban planning strategies. Limited land availability in central areas has prompted the development of expansive, master-planned suburban zones.
Major developers such as Emaar and Binghatti are leading this expansion, introducing projects that appeal to both local and international buyers.
Government authorities including the Dubai Land Department and the Roads and Transport Authority (RTA) are working in tandem to ensure long-term sustainability and livability across these new communities.
Apartments continued to dominate Dubai property transactions in Q1 2025, accounting for approximately 76 per cent of total residential sales. However, this represents a slight decline both quarterly and year-on-year.
The shift is largely attributed to increasing demand for larger homes, particularly among families and long-term residents looking for more space and lifestyle-centric environments. Investors, too, are recognising the value of townhouses and villas, especially in areas offering higher yields and family-friendly amenities.
Easier access for first-time buyers
Recent policy updates and financial initiatives have also contributed to this shift. First-time buyers now benefit from reduced down payment requirements and more accessible mortgage options, facilitated by strategic partnerships between developers and banks.
Mania Merrikhi, Chief Operating Officer and Managing Director of Chestertons MENA, noted:
“At Chestertons, we’ve seen Dubai evolve into a powerhouse for real estate investment. Initiatives like the D33 agenda are set to drive even greater economic and urban growth over the next decade. At the same time, attention is shifting towards other emirates, particularly Abu Dhabi, where high-profile developments and infrastructure projects are opening up exciting new opportunities for investors.”
Mohamed Mussa, Executive Director of Chestertons MENA, added:
“Government support continues to play a vital role in shaping the UAE’s real estate market. Buyer-friendly regulations are making it easier for first-time buyers to enter the market. These developments are attracting a new wave of international and family-oriented investors. Looking forward, we expect particularly strong demand for full-service, master-planned communities that deliver on lifestyle, convenience, and value.”
New residential projects on the horizon
Dubai saw the launch of approximately 95 new residential projects in Q1 2025, introducing nearly 28,600 new units to the pipeline. However, the pace of new launches slowed compared to previous quarters, contributing to a decrease in off-plan transaction volumes.
A report by Cavendish & Maxwell suggested that this slowdown may be strategic, with developers focusing on clearing existing inventory to improve absorption rates before adding further supply.
About 9,300 residential units were completed during the first quarter of 2025, with apartments comprising 79 per cent of the total. This marked the second-highest quarterly completion volume in the last two years, following Q4 2023.
Looking ahead, Dubai’s housing stock is set for significant expansion. Nearly 300,000 new residential units are projected to enter the market by 2028. A substantial portion of this supply is expected during 2026 and 2027, indicating a potential surge in completions.
For the remainder of 2025, roughly 73,000 units are slated for delivery.
However, these figures may shift due to evolving buyer preferences, market dynamics, and potential construction delays. Developers are expected to closely monitor the market to adjust release strategies accordingly.
Outlook: Value, lifestyle, and long-term potential
As Dubai’s residential property market continues to evolve, the spotlight is turning toward communities that balance affordability, lifestyle appeal, and long-term value. With supportive government policies, a steady influx of new projects, and investor-friendly conditions, Dubai remains a key market for regional and global real estate investors.
Chestertons MENA, backed by deep market insight and decades of experience, positions itself as a strategic advisor for buyers navigating the complexities of this dynamic landscape.
