Dubai's real estate market is transitioning into a stabilization phase in 2025, following a period of remarkable growth. Between 2022 and early 2025, residential property prices surged by approximately 60%, driven by strong international investor interest. Asico, a brokerage and developer, notes that this shift indicates a move towards a more balanced and sustainable trajectory.

Key Indicators of Stabilization:

• Price Adjustments: As of January 2025, the average price per square foot stood at AED1,484 ($404), reflecting a slight 0.57% month-on-month dip, signaling a cooling from the rapid escalation witnessed in previous years.

• Shift in Demand: While luxury properties continue to attract interest, there's a noticeable shift towards mid-market and affordable housing. In 2024, two out of five ready home sales were valued at less than AED1 million ($272,000), highlighting a broader market appeal and a move towards more sustainable growth.

• Supply Dynamics: Developers are responding to the evolving market by accelerating construction schedules, aiming to bring handovers forward by three to six months. This proactive approach is designed to meet current demand and prevent potential shortages, contributing to market equilibrium.

Wail Abualhamail, Director of Real Estate at Asico, stated, "The current phase of stabilization reflects the natural progression of a maturing market. We are seeing a shift from speculative buying towards more strategic, long-term investments. At Asico, we believe this evolution is a healthy sign, indicating investor confidence, improved regulation, and a more sustainable future for Dubai’s real estate sector."

Continued Market Activity:

Despite the stabilization, Dubai's real estate market continues to exhibit robust performance. In February 2025, the market recorded a 32% increase in transaction volume and a 37% rise in value compared to the same period in 2024, totaling more than AED50 billion ($13.6 billion). The off-plan market remains a significant driver of this activity, with a 38% increase in volume and a 60% increase in value year-over-year.

Key areas such as Dubai Creek Harbour, Mohammed Bin Rashid City, and Dubai Hills Estate continue to attract significant investor interest, underscoring the market's resilience and long-term growth potential.

As Dubai's real estate sector matures, the focus on sustainable growth, strategic investment, and market equilibrium positions the city as a stable and attractive destination for global investors.