Dubai Real Estate Market Enters a Maturing Phase as Apartment Demand Surges in Q3 2025
Dubai’s residential property sector is entering a more measured and sophisticated stage of growth. According to Betterhomes’ Q3 2025 Market Report, the city recorded 55,280 transactions worth AED 139.7 billion — representing an 18% year-on-year increase in both value and volume. However, the data signals a strategic recalibration from rapid expansion toward selective, segment-driven growth.
“The Q3 numbers paint a picture of a market in selective ascent rather than straight-line growth,” said Louis Harding, CEO of Betterhomes. “Demand is clearly tilting toward new supply, particularly in the apartment segment, which saw a 28% increase in transactions year-on-year.”
Off-Plan Apartments Lead the Market
Apartments were the clear outperformers in Q3 2025. Off-plan apartment sales surged 35% quarter-on-quarter — the highest jump on record. Studios and one- to two-bedroom units accounted for 80% of apartment transactions, driven by investor appetite for liquidity and rental returns. The total value of apartment sales reached AED 93 billion, with 81% from off-plan deals — a historic high.
Communities such as Jumeirah Village Circle (JVC), Business Bay, and Town Square continued to dominate off-plan launches and handovers, reinforcing Dubai’s reputation as one of the world’s most dynamic development hubs.
Villa Segment Cools After Record Growth
While apartment activity reached new heights, the villa and townhouse segment showed signs of moderation. Villa sales fell 22% year-on-year, while off-plan villa transactions dropped 69%, marking a post-rally adjustment after strong activity in early 2025. Harding observed that “villas, particularly off-plan units, are under pressure and may require recalibration between pricing, design, and buyer expectations.”
Nonetheless, villa communities such as Dubai Hills Estate and Arjan continue to attract end-user interest, particularly from families seeking more space and lifestyle amenities.
Rental Market Remains Strong
Dubai’s rental market continued its strong momentum, with leasing transactions nearly doubling year-on-year (+92%). Apartments led the way with a 42% quarterly increase, while townhouses grew 36%. The average annual rent stood at AED 196,000 — apartments averaging AED 145,000 and villas AED 429,500.
“Even as average rents stabilised, tenant activity and lead volume signal enduring confidence in Dubai’s leasing sector,” said Rupert Simmonds, Director of Leasing at Betterhomes. Popular rental hubs include Dubai Marina, Al Barsha, and Jumeirah Lake Towers (JLT).
Investor Confidence and Market Metrics
Investor activity remained dominant, representing 63% of all purchases, up from 58% in Q2. Mortgage-backed transactions accounted for 51%, indicating a balanced mix between cash and financed buyers. “Q3 2025 reflects Dubai’s depth and resilience,” said Christopher Cina, Director of Sales. “Even as prices eased 6% from Q2 peaks, volumes rose 11%, showing healthy diversification across price tiers and buyer segments.”
The average price per square foot rose to AED 1,664 — nearly double the 2020 average. In total, 28,500 new units have been delivered in 2025, with an additional 250,000 units in the pipeline through 2027. Apartments accounted for 85% of all Q3 handovers, reinforcing their central role in Dubai’s evolving urban landscape.
Market Outlook: Selective Growth and Mid-Segment Focus
As Q4 begins, experts predict a continued shift toward mid- to upper-mid-tier apartments, driven by affordability, rental yield, and lifestyle demand. Prime transactions, especially in the ultra-luxury sector, have temporarily slowed, suggesting a brief pause among high-net-worth buyers.
“The narrative is no longer about runaway growth but strategic realignment,” Harding concluded. “Mid-market apartments will remain the heartbeat of Dubai’s residential sector heading into 2026.”
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