Dubai’s real estate market has recorded its first monthly price decline since mid-2022, marking a significant turning point after years of relentless growth. According to data from Property Monitor, average prices dipped by 0.57 per cent in January 2025 to Dh1,484 per square foot, highlighting a potential shift toward market equilibrium.
Despite this price correction, transaction volumes remained robust, with January 2025 witnessing 14,413 sales—making it the strongest month on record. However, this figure reflected a 4.6 per cent decline from December 2024, suggesting a moderation in buyer momentum. The off-plan segment, while still dominant, saw a notable 17.7 per cent drop in sales compared to the previous month, with 7,555 transactions accounting for 52 per cent of the total market activity. Conversely, the ready property sector surged by 15.7 per cent, indicating a renewed interest in completed assets.
Market leaders Emaar, Damac, and Danube spearheaded sales, with Emaar securing a 16.5 per cent market share, followed by Damac at 15.8 per cent and Danube at 5.3 per cent. The slowdown in off-plan transactions comes as affordability constraints take center stage, particularly after the market’s meteoric 30 per cent surge in 2024.
Median property prices in January 2025 stood at Dh1.35 million for apartments, Dh2.61 million for townhouses, and Dh6.92 million for villas. While luxury deals, such as the Dh425 million Emirates Hills villa sale, continued tLog Outo make headlines, many buyers gravitated toward more affordable options like a Dh175,000 studio in Dubai Production City.
Zhann Jochinke, COO of Property Monitor, attributed this shift to the market’s growing maturity. “Dubai’s market is evolving. After a phase of explosive growth, stakeholders are recalibrating to balance supply with sustainable demand.”
Mortgage activity remained stable, with loan volumes rising 6.8 per cent month-on-month to 4,134, despite tighter Central Bank regulations. Loan-to-value (LTV) ratios also remained steady, signaling continued lender confidence. However, experts caution that interest rate fluctuations could influence future financing trends.
The moderation follows a record-breaking 2024, during which over 150,000 transactions reshaped Dubai’s property landscape. Analysts suggest that January’s dip reflects a natural market cycle rather than a downturn, with regulators and developers now focusing on long-term sustainability. With 12,400 new units launched in January alone, developers are expected to prioritize mid-market and sustainable housing to align with shifting buyer preferences.
As Dubai’s real estate sector transitions from a high-growth phase to a more measured trajectory, 2025 is set to test the market’s resilience and adaptability. Industry experts predict a continued polarization between ultra-luxury and budget-friendly segments, requiring a balanced regulatory approach to sustain growth.
While the era of guaranteed double-digit returns may be fading, Dubai’s property market still presents opportunities—albeit with a greater emphasis on strategy, diversification, and long-term vision.
Source: Khaleej Times
