The Dubai real estate market is entering a healthy “stabilisation phase” and investors are confident in long-term projects, according to brokerage and developer Asico.
Following a period of remarkable growth where residential property prices surged by approximately 60 per cent between 2022 and early 2025, driven by strong international investor interest, the market is now entering a phase of stabilisation in 2025, said Asico.
This transition indicates a move towards a more balanced and sustainable trajectory.
Dubai real estate stabilisation phase
Several key indicators point towards this stabilisation:
- Price adjustments: As of January 2025, the average price per square foot stood at AED1,484 ($404), reflecting a slight 0.57 per cent month-on-month dip, indicating 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 AED1m ($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 the current demand and prevent potential shortages, contributing to market equilibrium
Wail Abualhamail, Director of Real Estate at Asico, said: “The current phase of stabilisation 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.”
Despite the stabilisation, Dubai’s real estate market continues to exhibit robust performance. In February 2025, the market recorded a 32 per cent increase in transaction volume and a 37 per cent rise in value compared to the same period in 2024, totalling more than AED50bn ($13.6bn).
The off-plan market remains a significant driver of this activity, with a 38 per cent increase in volume and a 60 per cent increase in value year-over-year.
Key areas such as Dubai Creek Harbour, Mohammed Bin Rashid City, and Dubai Hills have been particularly popular for off-plan investments.
The Dubai government’s ongoing strategic initiatives are also playing a crucial role in bolstering the real estate sector.
The Dubai Economic Agenda (D33), which aims to double the emirate’s economy by 2033, specifically focuses on enhancing the contribution of the real estate sector.
Furthermore, policies such as the Golden Visa programme and the provision for 100 per cent foreign ownership in certain sectors have further strengthened investor confidence in the market.
Asico said: “As the market enters this phase of stabilisation, investors are presented with opportunities to make informed decisions in a more predictable environment”.
The increasing focus on mid-market properties opens avenues for a broader range of investments, while the sustained overall demand underscores the market’s long-term strength.
According to Asico, this stabilisation period signifies a maturing of Dubai’s property sector, where factors such as quality, thoughtful planning, and strategic location are expected to be the primary drivers of long-term returns, moving away from reliance on short-term speculation.
