Abu Dhabi and Dubai see significant growth in sales transactions, bolstering their real estate markets
The real estate sector in the UAE has solidified its role as one of the primary engines of economic growth, bolstered by increasing confidence from both local and international investors in the country’s economic fundamentals and adaptable legislative environment. This momentum continues as new development projects are launched, attracting foreign investment across various property segments.
According to the latest international reports, the UAE’s real estate sector is sustaining its upward trajectory in 2025, fueled by rising foreign direct investment, the expansion of off-plan projects, stability in the rental market, and government initiatives that foster innovation and enhance the investment appeal of the local market.
A recent report by JLL highlighted that off-plan properties led sales transactions in both Dubai and Abu Dhabi during the first half of the year, supported by the initiation of new projects and robust activity in the secondary market. This surge resulted in record levels of activity, with Dubai’s property sales reaching AED153.7 billion ($41.9 billion) in the second quarter, an increase of 44.5 percent year-on-year, while average sales prices in Abu Dhabi saw a rise of 12.1 percent during the same period.
Off-plan property growth
The report confirmed the ongoing growth of off-plan properties, backed by new project launches. Approximately 32,400 residential units are under construction in Abu Dhabi and Dubai during the second half of 2025, reflecting sustained strong demand from investors and buyers and affirming the market’s capacity to meet rising housing needs.
It was noted that the rental market in Abu Dhabi and Dubai remained stable, with tenants showing a preference for renewing existing contracts. This stability contributed to a 9.4 percent year-on-year increase in lease contracts in Abu Dhabi in the second quarter, while Dubai experienced an 11.5 percent rise in total residential leases.
In terms of sales, Abu Dhabi marked a 9.1 percent increase in total sales transactions, buoyed by strong growth in the secondary market of 32.6 percent. Meanwhile, Dubai continued to showcase annual growth of 22.8 percent in total sales, supported by ongoing off-plan launches and a 17.1 percent increase in secondary sales.
Office market overview
On the office market front, Abu Dhabi’s stock increased by 78,000 square metres in the second quarter, reaching 4.6 million square metres, with an additional 66,000 square metres expected by year’s end. In Dubai, 24,000 square metres of office space were added, bringing the total to 9.3 million square metres, with 2026 anticipated to witness a wave of premium offices delivered within Dubai International Financial Centre, totaling 264,000 square metres.
In parallel, a report by Statista projected that the UAE real estate market will reach $693.53 billion by the end of 2025, with the residential segment leading at $401.81 billion. The sector is expected to achieve an annual growth rate of 2.28 percent until 2029, ultimately reaching $759.04 billion. The market continues to draw increasing interest from high-net-worth individuals seeking luxury properties, further solidifying the country’s status as a premier global investment destination.
Growth projections
In the same context, a report by Mordor Intelligence estimated the UAE real estate services market at $18.45 billion in 2025, with expansion to $24.75 billion expected by 2030, reflecting a compound annual growth rate of 6.05 percent. This growth underscores the sector’s resilience, driven by heightened foreign investment, rising demand for logistics assets, and the development of data centers and premium housing projects.
The report also indicated that Ras Al Khaimah is projected to achieve the highest growth rate in the coming years, emphasizing the diversity of investment opportunities and the expansion of real estate activity across all emirates.
The UAE’s real estate sector is experiencing continued growth and dynamism in 2025, consolidating its vital role as a key driver of economic progress. The sector benefits from rising foreign direct investment, extensive off-plan project developments, stable rental markets, and government initiatives fostering innovation and investor confidence. Dubai and Abu Dhabi remain the leading emirates, while other emirates like Ras Al Khaimah and Sharjah are emerging as attractive new investment destinations, diversifying growth across the country.
Stability in leasing activity
Dubai’s property sales surged to AED153.7 billion ($41.85 billion) in Q2 2025, marking a 44.5 percent year-on-year increase. Off-plan properties dominated transactions, supported by a strong secondary market and new project launches. This strong activity is echoed in Abu Dhabi, where average sales prices rose by 12.1 percent during the same period, accompanied by a 9.1 percent increase in total sales and 32.6 percent growth in the secondary market. These numbers affirm sustained investor demand and a market capable of meeting housing needs.
The residential market shows stability in leasing activity, with Abu Dhabi and Dubai registering respective increases of 9.4 percent and 11.5 percent in lease contracts year-on-year in the second quarter. Renters are favoring renewals, which helps stabilize the rental market and ensures steady cash flow for landlords. Additionally, Dubai’s strong luxury housing market continues to outperform global peers, with high-net-worth investors driving demand for villas, penthouses, and premium residential towers. This trend also supports a forecast by Statista that the UAE residential real estate market will reach approximately $401.81 billion in 2025, with the overall real estate sector expected to grow steadily to $759 billion by 2029.
Diversification beyond residential real estate
Government policies remain a cornerstone of the sector’s success. Digital transformation initiatives introduced by Dubai Land Department, such as blockchain-powered property transactions, enhance transparency, security, and simplify procedures, boosting investor confidence. The Golden Visa program tied to property ownership attracts wealthy individuals and families by granting long-term residency benefits, adding to demand for luxury and mid-range properties.
The UAE is also seeing diversification beyond residential real estate. The industrial and logistics segments are growing rapidly due to the UAE’s status as a major global trade hub and the surge in e-commerce. Areas like Dubai Industrial Park and Khalifa Industrial Zone Abu Dhabi (KIZAD) attract companies seeking advanced warehousing and distribution centers. Moreover, demand for data center real estate is rising in tandem with the nation’s digital economy ambitions, including the deployment of 5G and AI-driven services.
Emerging investment destinations
Office real estate is expanding with Abu Dhabi increasing its office stock to 4.6 million square meters by mid-2025 and Dubai growing to 9.3 million square meters. The upcoming delivery of premium office space in Dubai International Financial Centre by 2026 (around 264,000 square meters) is expected to further attract international financial and professional services firms, strengthening the UAE as a regional business hub.
Emerging emirates like Ras Al Khaimah are projected to have the highest real estate growth rates, demonstrating the sector’s geographic diversification. Sharjah and Ajman also attract investors due to their more affordable housing options and ongoing infrastructure developments that broaden the scope of opportunities beyond the traditional core cities.
Evolving financing options for investors
Price trends reflect robust demand with Dubai’s villas experiencing significant price growth (up to 41 percent in some areas like Jumeirah Islands), while apartment prices also show steady appreciation. However, analysts foresee a market rebalancing and moderation in price growth as supply increases substantially between 2025 and 2027, with more than 150,000 new homes expected to be delivered in Dubai alone. This supply surge is anticipated to lead to greater buyer choice and more stable price dynamics, though it may slow the rapid appreciation seen in recent years.
Finally, real estate financing options have become more diverse and accessible, supporting increased market participation. Competitive mortgage products, flexible loan-to-value policies, and emerging investment models such as crowdfunding and tokenization expand opportunities for a wider demographic of investors and homeowners.
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