Dubai Real Estate Market Shifts to End-User Purchases
Dubai’s real estate sector is experiencing a significant transformation, with a marked increase in home purchases by residents rather than investors. Recent reports indicate that the market is not only thriving but also evolving, as more individuals seek to establish long-term roots in the city.
Surge in Residential Transactions
According to Espace Real Estate’s Q3 2025 Residential Market Overview, residential transactions in Dubai reached an impressive Dh138 billion, reflecting an 18% increase compared to the same period last year. This surge translates to approximately 55,280 deals, showcasing a robust liquidity in the market. The growth is attributed to both off-plan properties, which accounted for 70% of sales, and ready properties, making up the remaining 30%. This diverse demand highlights the market’s resilience across various segments.
Off-Plan Sales and Developer Innovations
The off-plan property market continues to thrive, driven by flexible payment plans and a strong pipeline of new developments. Key areas such as Dubai South, Business Bay, and Jumeirah Village Circle (JVC) have emerged as leaders in off-plan sales. Espace Real Estate noted a notable interest in branded residences and waterfront projects, particularly around Dubai Creek Harbour and Palm Jebel Ali, following a wave of new launches. The increasing share of off-plan sales indicates both investor confidence and innovative strategies from developers.
Price Trends and Community Performance
Espace’s analysis reveals that property prices have risen in 31 out of 34 tracked communities, with the villa market standing out as a top performer. Areas like Emirates Living, Arabian Ranches, and Jumeirah Park recorded double-digit annual price increases. Notably, Jumeirah Islands saw villa prices soar by 22% year-on-year, while Palm Jumeirah remains the priciest community, with average villa prices exceeding Dh5,000 per square foot. The Meadows and Jumeirah Golf Estates also experienced heightened transaction volumes, reflecting a growing demand from families seeking long-term housing solutions.
Changing Buyer Demographics
Both Espace and Property Finder have observed a significant shift in the buyer demographic. More residents are now viewing Dubai as a permanent home rather than a temporary investment opportunity. Property Finder’s data indicates that nearly 60% of buyers in October 2025 were UAE residents, with first-time homeowners playing a crucial role in this trend. Popular neighborhoods for these buyers include JVC, Dubai Hills Estate, and Damac Hills 2.
Rental Market Stabilization
After experiencing two years of steep rent increases, the rental market in Dubai is showing signs of stabilization. Property Finder reports that rental activity has plateaued, particularly in areas like Downtown Dubai, Dubai Marina, and JVC, where supply has improved. Many tenants are opting to either remain in their current homes or purchase properties instead of continuing to rent. Affordable villa communities such as Arabian Ranches 3, Mudon, and Dubai South are particularly appealing to families seeking space and value.
Luxury Market Dynamics
The luxury property segment remains robust, with the AED 5–10 million price range witnessing the most significant growth, increasing by 60% year-on-year. Communities like Dubai Hills Estate, Palm Jumeirah, and Tilal Al Ghaf continue to dominate luxury transactions, while mid-tier buyers are gravitating towards JVC and Al Furjan.
Future Outlook
As interest rates begin to ease and developers continue to launch new off-plan projects, the final quarter of 2025 is poised for continued activity. Espace anticipates that transaction volumes will remain high into early 2026, especially as Dubai continues to attract both international capital and long-term residents. The market is shifting from speculative investments to growth driven by end-users, supported by strong population growth, low taxes, and a high quality of life.
FAQs
What factors are driving the increase in home purchases in Dubai?
The increase is largely due to a shift in buyer demographics, with more residents purchasing homes for long-term living rather than investment. Additionally, flexible payment plans and a variety of property options have contributed to this trend.
Which areas are popular among first-time homebuyers in Dubai?
First-time homebuyers are particularly interested in neighborhoods such as Jumeirah Village Circle (JVC), Dubai Hills Estate, and Damac Hills 2, where they can find affordable options and community amenities.
How is the rental market performing in Dubai currently?
The rental market is stabilizing after two years of significant increases. Many tenants are choosing to stay in their current homes or buy properties instead of renting, especially in areas with improved supply.
Conclusion
Dubai’s real estate market is undergoing a notable transformation, with a growing number of residents opting to buy homes for long-term living. As the market continues to evolve, potential buyers are encouraged to consider their options, especially with favorable conditions for purchasing. The future looks promising as Dubai solidifies its status as a desirable place to live and invest.
Also Read:
New Long-Term Residency Options for UAE Residents in GCC
