Dubai sees sharper drop in available homes under Dh1 mln in 2025 as demand surges

25/11/2025 02:04 AST

Properties are being sold faster than the new inventory coming to the market, especially in the price bracket of below Dh1 million.

According to an analysis released by global real estate consultancy Knight Frank, there are fewer properties available for sale valued below Dh1 million in Dubai due to exceptionally high demand in 2025, as preference among residents and investors grows for more affordable and smaller units following a record price rally in five years.

There has been a 14 per cent reduction in the number of homes on the market priced below Dh1 million in the first nine months of 2025, while the number of sales taking place in this segment of the market has grown by 10 per cent over the same period.

There has been a rise in the number of listings of properties priced at Dh1.25 million, but the corresponding rise in deal activity has been at a faster rate. "In essence, sales are happening faster than the stock is being replenished," added Knight Frank. The agency consultancy analysed the change in the volume of home listings (supply), alongside the change in the number of home sales (demand), by price band as a way to get a 'heads-up' on any potential signs of a market imbalance.

Despite concerns around slowdown and or a big correction, Dubai's real estate market continues to defy the projections and maintains its steady momentum for the past five years. Though some segments are said to be slowing, overall momentum and sentiment remain positive in the market.

However, the only exception are ultra-luxury properties of over Dh25 million where stocks are rising faster than the sales.

"Over the Dh25 million threshold, stock levels are rising faster than the rate of deals. This isn't all that surprising given that developers are publicly pivoting toward the luxury and uber-luxury end of the market to capitalise on the insatiable demand from the global elite for luxury homes in the city," said Shehzad Jamal, partner for strategy and consultancy, Middle East and Africa, Knight Frank.

5 years of quarterly growth
Carrying momentum into the third quarter of 2025, Dubai's residential property market saw a sustained strength and resilience across all key indicators as average values rose by 2.5 per cent during Q3, extending an unbroken run of quarterly growth that began in late 2020, leaving values 10 per cent higher than this time last year.

Aggregate residential transaction volumes for the year to date have exceeded Dh310 billion - one of the highest totals ever recorded. During Q3 alone, sales reached Dh117 billion, marginally higher than the same quarter last year.

"As with any cycle, however, there is always a beginning, a middle and an end. And after an uninterrupted five-year property price rally, we are starting to see a slowing in the rate of quarterly rises, which averaged 2.02 per cent in 2021, 2.22 per cent in 2022, 4.34 per cent in both 2023 and 2024 and eased to 3.2 per cent between Q1 and Q3 this year.

"Nonetheless, this persistent upward trend, which has now spanned five full years, has delivered on the promise of the 'roaring twenties' we predicted back in 2021," said Faisal Durrani, partner and head of research for Mena at Knight Frank.

Average apartment prices increased by around 2.3 per cent quarter-on-quarter and 9.6 per cent year-on-year in Q3, led by waterfront and central districts. The villa market continued to outperform apartments during Q3, with prices rising by an average of 3.6 per cent quarter-on-quarter, leaving them 12 per cent higher than in Q3 2024.

Khaleej Times