DUBAI – Dubai's real estate market will remain strong through 2025 driven by record tourism numbers and sustained investment demand according to Elite Merit Real Estate. The market faces a serious test as developers prepare to deliver over 200,000 units.

The city welcomed 9.88 million visitors indicating a 6% year-on-year growth with hotel occupancy at 80.6%. The tourism spurt is creating demand for short-term leases and hospitality-associated properties throughout the emirate.

Sales Activity Maintains Momentum

Off-plan sales continue to dominate the market accounting for 69% of all transactions in Q1 2025. The average citywide property price reached AED 1,749 per square foot reflecting a 3.7% quarter-over-quarter increase and signaling continued buyer confidence.

The luxury segment hit new heights in Q2 2025 with transactions for homes priced above $10 million totaling $2.6 billion. This marks a record for Dubai's super-prime market as high-net-worth buyers target premium waterfront and branded properties.

Major Supply Wave Approaching

Knight Frank projects 70,452 units will be handed over in 2025 with another 133,041 units coming in 2026. These figures sit well above historical averages and represent a significant expansion of Dubai's housing stock.

Fitch Ratings warns this supply influx could trigger a 10-15% price correction particularly in mid-market segments where most new inventory is concentrated. Premium properties are expected to hold value due to limited supply and strong global demand.

Developers with staggered handovers, strong financial controls and strict escrow procedures are best positioned to navigate the supply wave. The market is shifting toward a flight-to-quality dynamic where brand reputation, location and sustainability credentials determine property values.

Branded Residences Gain Traction

Branded homes span approximately 140 projects across Dubai and continue attracting international investors. These properties consistently command premium valuations compared to non-branded developments. Short-term rental investments benefit from clear Dubai DET framework regulations with annual permits costing AED 300 per bedroom. 

New Districts Reshape Market Geography

Palm Jebel Ali's relaunch will add 13.4 kilometers of new waterfront while Expo Valley begins delivering 532 units in phase one starting early 2026. Expo City is drawing increased interest from European high-net-worth individuals. These projects signal a broader geographic spread of investment activity and diverse property options through 2026.

Market Outlook and Challenges

The mid-market segment faces near-term pressure from the supply surge combined with rising borrowing costs and service fees that impact affordability. However the prime and super-prime tiers are expected to maintain record activity supported by land scarcity, Golden Visa incentives and growing international demand.

Elite Merit Real Estate concludes that branded, environmentally conscious and well-located developments will prove most resilient in the next market cycle as investors prioritize quality over price alone.