Dubai’s residential property market has reached unprecedented levels in the second quarter of 2025, with transaction volumes and values both setting new records, according to analysis from Knight Frank.
Residential prices climbed 13.7 per cent compared to the same period last year, with villas leading the growth at 16 per cent year-on-year, Knight Frank’s Dubai Residential Market Review Q2 2025 said.
The emirate recorded over 51,000 home sales in Q2 2025, marking the highest quarterly figure on record.
Dubai’s residential market soars higher
Total sales for the first half of 2025 reached more than 94,000 transactions, positioning the market to exceed the 169,000 deals completed in 2024.
The value of residential sales in the first six months hit AED 268 billion, representing a 41 per cent increase from the corresponding period in 2024.
Citywide residential prices rose 3.4 per cent during Q2 2025, reaching an average of AED 1,809 per square foot. Current values now stand 21.6 per cent above the previous market peak recorded in 2014.
Faisal Durrani, Partner – Head of Research, MENA, said: “The sustained growth in prices – now approaching five consecutive years since the current cycle began in November 2020 – is a clear sign of a more stable and predictable market environment. This is precisely the kind of consistency that global investors seek. Knight Frank’s forecasts for 2025 remain unchanged, with 8 per cent growth expected in the mainstream market and 5 per cent in the prime segment.
“A segment to watch remains the villa market. Just 20 per cent of the planned housing supply through to the end of 2029 will fall in the villa category and with demand remaining centred on stand-alone family homes, the delta between villa and apartment price performance may well continue to widen.”
Knight Frank maintains its 2025 forecasts, projecting 8 per cent growth in the mainstream market and 5 per cent in the prime segment.
Villa values reached AED 2,172 per square foot, marking a 4 per cent quarterly increase and a 49.3 per cent rise since 2014.
The prime residential segment achieved new records, with values across ten key communities rising 16 per cent over the past 12 months. The average prime transacted price now stands at AED 3,850 per square foot.
Off-plan sales dominated the market, accounting for nearly 70 per cent of all transactions in Q2 2025.
This reflects growing investor confidence and the appeal of new developments across Dubai. Prime areas including Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, and Dubai Hills Estate remain the most sought-after locations, particularly among international high-net-worth individuals.
Sales of homes priced above $10 million reached AED 9.5 billion in Q2 2025, the highest quarterly figure on record.
For the first time since Q2 2023, apartments outpaced villas in the $10 million-plus segment, with 80 apartment sales compared to 63 villa transactions.
Will McKintosh, Regional Partner – Head of Residential, MENA, added: “The market is increasingly being shaped by genuine buyers rather than speculators, with resale activity within 12 months of purchase now at just 4–5 per cent, compared to 25 per cent in 2008. This shift toward end-user activity is a positive indicator of the market’s growing maturity and long-term sustainability.
“As we approach the fifth year of Dubai’s current growth cycle in November 2025, we are seeing the property market mature and align with global norms in a meaningful way. It has become more stable, more transparent and is underpinned by solid fundamentals. This shift is drawing in more long-term investors and end-users and is helping to strengthen Dubai’s position as one of the most attractive residential markets globally.”
Knight Frank’s annual Destination Dubai 2025 report identifies the emergence of “accidental millionaires” – homeowners whose properties have appreciated beyond $1 million due to market inflation. As of Q2 2025, Dubai contains 110,000 such homes, with 37,000 owned by individuals who originally purchased below the million-dollar threshold.
The current growth trajectory positions 2025 to surpass the AED 367 billion in residential sales achieved in 2024, with sustained momentum across all market segments.
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