Engel & Völkers 2025 Annual Report Highlights Dubai’s Strongest Year On Record As Market Enters A More Sustainable Growth Phase

Engel & Völkers Middle East, a leader in premium residential and commercial real estate services, has released its 2025 Annual Market Report, positioning the year as a defining moment in Dubai’s real estate evolution. 2025 delivered the highest levels of transaction volume and value ever recorded, while also marking a transition in market dynamics. After several years of rapid expansion, Dubai is now moving into a phase characterised by deeper participation, broader demand, and more measured, sustainable growth, anchored by strong fundamentals and long-term confidence.

“2025 was a defining year for Dubai’s real estate market. It delivered exceptional scale and confidence, but more importantly, it marked a shift in the market’s evolution,” said Daniel Hadi, CEO of Engel & Völkers Middle East. “Dubai continues to attract businesses, capital, and skilled professionals from around the world, supported by political stability, a competitive tax environment, world-class infrastructure, and a clear long-term vision. What stands out today is the market’s maturity, with demand spanning a wide spectrum of end-users and investors across established communities and emerging districts.”

According to the report, Dubai’s residential sector delivered another year of broad-based momentum in 2025, supported by sustained inflows of capital and talent, global connectivity, and a resilient macroeconomic backdrop. Demand continued to deepen across both ready and off-plan markets, reflecting a city where housing has become increasingly central to long-term prosperity, linked to employment creation, household formation, and Dubai’s policy-led development trajectory.

Residential sales: growth across apartments, villas and townhouses

Dubai’s residential sales market reached new highs in 2025, with total transactions rising to 202,349 and total value reaching AED 546.8 billion, reflecting continued confidence across investors and end-users. Apartments remained the dominant driver of activity, accounting for 83% of all transactions while villas and townhouses sustained strong performance across a growing range of established and emerging communities—signalling the breadth and resilience of demand across the market.

Engel & Völkers notes that off-plan transactions accounted for 64.8% of all residential sales in 2025, reinforcing investor confidence in Dubai’s development pipeline while also highlighting a key market reality: secondary-market growth is increasingly constrained by the availability of ready stock rather than a lack of demand.

“What stood out most in 2025 was the depth of demand we are seeing across all property types and locations. Buyer interest remains exceptionally broad-based, and activity in the secondary market continues to be driven by real end-user and investor demand rather than short-term sentiment,” said Robert Villalobos, Head of Brokerage, Engel & Völkers Dubai.

Apartment transactions rose to 167,841 in 2025, with total sales value rising to AED 328.5 billion, a 31.8% increase from 2024, supported by strong off-plan momentum and continued secondary-market demand in communities with proven infrastructure and lifestyle appeal. The year also saw the villa segment widen beyond traditional prime pockets with total sales value rising to AED 141.2 billion, a 30.5% increase from 2024. Engel & Völkers highlights particularly strong traction in the upper mid-market (AED 4 to 8 million) as families, lifestyle upgraders, and long-term investors increasingly committed to new master-planned communities such as Grand Polo Club and Resort, The Oasis, The Wilds and The Valley.

Townhouse sales reached their highest level on record, reaching 22,904 transactions, a 4.6% increase compared to 2024 and the highest annual volume on record. Total sales value climbed to AED 74.4 billion, up 12.9% year-on-year, underlining sustained buyer appetite for the segment, reinforcing a structural shift toward family-oriented housing driven by population growth and evolving liveability preferences.

Luxury market: resilient demand at the top end

Dubai’s luxury residential market maintained strong momentum throughout 2025, with 6,765 transactions above AED 10 million, underpinned by continued international wealth inflows and an expanding pipeline of ultra-luxury developments. Engel & Völkers’ report notes that buyer demand at the top end is increasingly shaped by a broader mix of locations and product types, including waterfront and master-planned destinations, reflecting the growing depth of choice for high-net-worth and ultra-high-net-worth buyers. Palm Jumeirah retained its leading position in the USD 10 million+ segment, while Jumeirah and La Mer strengthened their role as central ultra-luxury hubs, driven by the success of new branded and boutique developments.

Notable transactions included a AED 550 million off-plan penthouse at Bugatti Residences in Business Bay, a AED 425 million secondary market villa in Emirates Hills, and a AED 300 million off-plan villa at EOME on Palm Jumeirah, reinforcing Dubai’s standing within the global ultra-prime landscape.

Alongside business expansion, the UAE has consolidated its position as the world’s leading destination for wealth migration. Henley & Partners estimates that 9,800 millionaires will have relocated to the UAE by the end of 2025, underpinned by political stability, lifestyle appeal, global neutrality, and a highly competitive tax environment. This influx of high-net-worth individuals has been a key driver of the luxury segment, which once again emerged as a standout performer during the year.

Buyer profile: resident-led demand with global reach

Engel & Völkers’ buyer data reflects Dubai’s growing international appeal alongside strong local participation. In 2025, UAE residents accounted for 75.5% of buyers at Engel & Völkers, with non-residents representing 24.5%, underscoring the market’s evolution toward long-term ownership and end-user depth.

Engel & Völkers’ buyer nationality data highlights the strength of European demand, with the United Kingdom and Germany leading activity, followed by the UAE, India, France, and a broad mix of European and regional markets. This distribution reflects both Dubai’s growing global appeal and the depth of international capital now actively participating in the market.

Dubai’s commercial real estate market also delivered a strong performance in 2025, supported by business expansion, corporate relocation, and sustained investor demand. Commercial sales reached AED 135.6 billion across 13,175 transactions, with activity led by the office sector, where transactions increased by 54.5% year-on-year and the total sales value more than doubled. Engel & Völkers notes that demand was concentrated in well-connected business districts, reflecting occupier preference for established infrastructure, modern stock, and long-term operational certainty. Growing interest in off-plan offices further highlights confidence in Dubai’s commercial growth trajectory and the city’s position as a regional business hub.

Outlook: 2026 becomes more selective and more strategic

Engel & Völkers expects Dubai to enter 2026 from a position of exceptional strength, with the market transitioning from rapid acceleration into consolidation, deeper participation, and more selective growth. Rather than broad-based outperformance, results are expected to become increasingly differentiated, driven by location quality, infrastructure maturity, developer execution, and long-term liveability.

Wealth migration remains a powerful structural driver, particularly for the luxury market, reinforcing Dubai’s role as a global destination for high-net-worth individuals seeking stability, lifestyle, and long-term capital preservation. At the same time, rental yields remain among the most competitive globally, supporting continued investor engagement and anchoring demand even if price growth moderates.

Supply is scheduled to increase materially over the next two years, with the expanding pipeline likely to bring greater balance to the market. In the rental sector, additional apartment supply may begin to ease upward pressure on rents, offering some relief to tenants, while family villa communities are expected to remain structurally undersupplied in many locations.

“Overall, the outlook for 2026 is one of stability, depth, and continued opportunity, with growth driven by fundamentals rather than momentum, and a market that continues to become one of the world’s most resilient and globally connected real estate environments,” concluded Hadi.