Dubai's Real Estate Boom: Buyer Caution Urged

Dubai Real Estate Market: Secondary Market Booming, Caution Over Greedy Pricing

In the first half of 2025, Dubai's secondary real estate market showed outstanding performance, particularly in the villa and townhouse segments. Sales value increased by 46 percent year-over-year, while contracts for off-plan projects — those still under construction — only rose by 25 percent. Experts suggest this trend clearly indicates that buyers increasingly seek move-in-ready, quality homes, especially in family-friendly neighborhoods.

Strong Demand for Villas and Townhouses

The market's dynamics are largely determined by the persistent supply shortage relative to demand. While 78 percent of transactions in the secondary market involved apartments, in terms of value growth and sold property value, villas and townhouses dominated. These property types accounted for 22 percent of the secondary market volume, yet saw an average price increase of 15 percent, compared to only 5 percent growth in off-plan projects.

In the price range of Dh5 million to Dh10 million, sales increased by 50 percent, while the luxury segment above Dh10 million saw a 113 percent jump. This clearly shows that affluent buyers choose Dubai not only for its lifestyle but also as a long-term capital appreciation opportunity in real estate.

Concerns Over Excessive Pricing

Despite the momentum, several real estate experts warn of the dangers of excessive pricing. Some sellers take advantage of the demand pressure to ask unreasonably high amounts for their properties — often significantly exceeding their actual market value. This "greedy" pricing can be profitable in the short term but may lead to corrections in the market over the long term.

Due to the current supply shortage, many buyers are willing to pay a premium for fully renovated, move-in-ready homes, especially in sought-after residential communities. This trend has boosted investments in upgrading apartments and villas, resulting in exceptional resale returns.

The Second Half Could Also Be Strong

Demand-driven growth is expected to continue throughout the rest of the year, particularly in the secondary market. Interest in villas and townhouses remains high, while the supply of new, immediately available properties remains limited. This imbalance could further drive up prices, particularly in the mid- and upper-tier segments.

Summary

Dubai's secondary real estate market showed robust growth in the first half of 2025, driven by sustained demand for family-friendly homes and limited supply. However, market players warn that excessive pricing could backfire in the long run, necessitating a healthy market correction. Interest and investment willingness remain strong, suggesting further robust activity in the second half of the year.

(The article is based on opinions of real estate experts.)