Dubai’s real estate market has once again demonstrated its resilience and appeal, with the third quarter of 2025 marking significant milestones in both residential and commercial sectors. According to the latest report by Savills, over 50,000 homes were sold in this period, and office rents saw an impressive 35% year-on-year increase, highlighting the emirate’s robust economic activity and investor confidence.

The residential real estate sector in Dubai continues to break records, driven by a combination of factors including population growth, increased homeownership among expatriates, and the migration of high-net-worth individuals. The transaction volumes have remained above 50,000 for two consecutive quarters, surpassing historical averages and reflecting a vibrant market environment.

Residential Market Dynamics

In the residential sector, apartments have dominated the market, accounting for 86% of all transactions, a significant increase from 75% in the first quarter. This trend underscores the strong investor confidence in new launches, with off-plan sales representing 69% of total deals. Andrew Cummings, Head of Residential Agency, Middle East at Savills, emphasized the diverse pool of buyers attracted to Dubai’s market, ranging from end-users to investors drawn by the emirate’s stable regulatory framework and global appeal.

“The growing preference for homeownership reflects the city’s transition from a transient to an established, family-friendly market,” Cummings noted. This shift is further supported by the launch of luxury projects across key master developments, driving average prices per square foot to new highs for both apartments and villas.

In the prime residential segment, approximately 1,500 transactions exceeded AED10 million ($2.72 million), with villas accounting for 73% of this activity. The third quarter also saw the completion of 8,500 new units, bringing the total completions for the year to nearly 30,000, matching the annual total for 2024. Looking ahead, more than 250,000 units are expected to be delivered by 2028, indicating a strong development pipeline.

Commercial Real Estate: A Booming Office Market

The office market in Dubai has maintained a positive trajectory, buoyed by strong non-oil economic growth and a steady influx of new companies. Average office rents have reached AED 233 per square foot ($63.4), marking a 4.5% increase quarter-on-quarter and a substantial 35% rise year-on-year. This growth reflects sustained demand despite limited new supply, with leasing activity remaining robust even during the traditionally slow summer months.

Technology and media firms, along with pharmaceutical companies, have been at the forefront of leasing activity, each accounting for 29% of total transactions. The consulting and energy sectors also contributed significantly, each representing 14% of the leasing activity. Toby Hall, Head of Commercial Agency, Middle East at Savills, highlighted the market’s ability to defy expectations, with strong leasing activity across both established and emerging submarkets.

“The combination of limited Grade A availability and sustained occupier confidence has maintained upward pressure on rents,” Hall explained. Developers are responding to this demand with plans to complete around 1 million square feet of new office space between late 2025 and early 2026, much of which has already been pre-leased, indicating strong forward demand.

Population Growth and Economic Prospects

Dubai’s population growth continues to be a critical driver of the real estate market, with the population surpassing 4 million during the quarter. The emirate’s appeal as a global hub is further underscored by forecasts from Henley & Partners, predicting that 9,800 millionaires will relocate to the UAE in 2025. This influx of wealth and talent is expected to sustain long-term demand for high-quality commercial real estate.

The UAE’s GDP is forecast to grow by 4.7% in 2025, reinforcing the positive outlook for the real estate market. Savills anticipates that Dubai’s real estate market will maintain strong fundamentals through the remainder of the year. While the office sector is projected to see moderate rental growth as new Grade A completions enter the market, residential demand is set to remain robust, supported by quality-of-life advantages and sustained investor confidence.

Overall, Dubai’s real estate market continues to thrive, driven by a dynamic mix of population growth, economic activity, and investor confidence. As the city continues to evolve into a more established and family-friendly market, its appeal to both local and international investors remains strong, promising continued growth and development in the years to come.

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