In Q4, the weighted average capital value of a villa in Dubai reached AED14.4 million, rising 25.1 percent annually
Dubai’s real estate market posted notable price growth in the fourth quarter of 2025, with the citywide freehold residential market witnessing increases of 19.8 percent annually, according to the latest ValuStrat Price Index report. The price growth witnessed in the final quarter of the year was lower than the previous quarters, with the city marking 21.3 percent growth in the previous quarter and 27.5 percent a year earlier.
On a quarterly basis, the price index rose 4.3 percent to reach 240.4 points, based on a baseline of 100 set in Q1 2021.
“Dubai’s real estate market continued to expand in Q4 2025, albeit at a moderating pace. The ValuStrat Price Index rose 19.8 percent annually, confirming a gradual deceleration in residential capital growth after several years of rapid appreciation,” said Haider Tuaima, Managing Director & Head of Real Estate Research, ValuStrat.
Villas continue to significantly outperform apartments
Residential capital growth across Dubai’s real estate market has been slowing for the past 15 months, yet villas continue to significantly outperform apartments. In Q4, the weighted average capital value of a villa in Dubai reached AED14.4 million, rising 25.1 percent annually, compared to AED2 million for apartments, which grew 14.2 percent over the same period.
The valuation-based index for villas rose to 323.9 VPI points, reflecting a moderated quarterly increase of 5.3 percent. Jumeirah Islands recorded the strongest uplift at 7.7 percent, followed by Palm Jumeirah at 7 percent. The Meadows, Dubai Hills Estate and Furjan each saw gains of 5.3 percent, while Jumeirah Village Triangle and Al Furjan posted increases of 5.1 percent. Mudon registered the most modest growth at 2.8 percent.
Meanwhile, apartments saw a modest quarterly increase of 3.1 percent, bringing the VPI to 185.9 points. The strongest quarterly gains were recorded in Remraam and The Greens, both at 4.6 percent, followed by The Views at 4.4 percent, Dubailand Residence Complex at 4 percent and Dubai Silicon Oasis at 3.9 percent, with Town Square close behind at 3.8 percent. In contrast, International City and Al Furjan posted the softest growth rates of the quarter.
“Dubai’s official resident population was revised to 4.25 million in 2024, with peak-hour population reaching 5.9 million. By 2025, the resident population is estimated to have risen to just under 4.5 million, while peak-hour population expanded to approximately 6.1 million. This sustained population growth, particularly during working hours, continues to place upward pressure on housing demand, infrastructure, and commercial real estate,” added Tuaima.
Prime segment continues to expand strongly as price growth moderates
The report also revealed that the prime and high-end homes segment in Dubai’s real estate market continued to expand strongly. However, capital growth in this category has begun to moderate and is now trailing the quarterly pace observed in mainstream residential properties.
Homes valued at AED21,528 per sq m (AED2,000 per sq ft) or more account for approximately 35 percent of Dubai’s freehold residential market. The VPI for this segment reached 252.3 points in Q4 2025, compared to its baseline of 100 set in Q1 2021.
Prime property values increased by an average of 20.4 percent annually and 4.2 percent quarterly, marking the slowest quarterly rise since Q2 2023. The prime villa sub index reached 339.5 points, up 20.4 percent annually and 5.6 percent quarterly, slightly easing from the 5.9 percent recorded in Q3. Since the market trough in 2021, most villa communities have seen their valuations triple, while Jumeirah Islands and Palm Jumeirah have recorded fourfold increases.
Meanwhile, Dubai’s premium apartments continued to appreciate, albeit at a more measured pace compared to villas. The segment recorded a 13.8 percent annual increase and a 2.8 percent quarterly rise, reaching 199.1 points on the ValuStrat Price Index.
Supply projected at a record 131,234 units in 2026
Official records indicate that Dubai’s real estate market entered 2024 with a total of 855,927 existing residential units. Total estimated completions as of 2025 stood at 26,810 apartments and 9,382 villas, equivalent to 59 percent of preliminary estimates of 2025.
In Q4 2025, Dubai saw the completion of 1,987 apartments in Jumeirah Village Circle, 808 units in Arjan, 804 apartments in Dubai Studio City, 578 houses in Damac Hills 2 and 540 homes in Tilal Al Ghaf. Significant building completions included Azizi Vista in Dubai Studio City with 163 apartments, Pearl House II in Jumeirah Village Circle with 198 units and Park Field Towers in Dubai Hills Estate, delivering 304 units. Notable villa completions included Santorini at Damac Lagoons, delivering 367 homes, and Elie Saab 1 and 2, adding 129 and 131 units, respectively.
The pipeline of new residential supply for 2026 is estimated at a record 131,234 units, comprising approximately 81 percent apartments and 19 percent villas and townhouses. However, these projections remain subject to downward revisions, consistent with prior years, due to persistent construction delays
The report also reveals that 187,676 apartments and 39,291 villas and townhouses are actively under construction, with handovers promised by 2029. Of these projects, 10 percent are located in Jumeirah Village Circle, with another 6 percent located in Business Bay, followed by Damac lagoons, Jumeirah Lake Towers and Dubai Hills Estate with 4 percent each.
Market sees record 13,626 secondary home transactions
In the fourth quarter, Dubai’s real estate market saw a record 13,626 secondary (ready) home transactions, representing a rise of 2.2 percent year-on-year and 9.4 percent quarter-on-quarter, with a total value of AED36 billion. The average ticket size of ready properties reached AED2.7 million, up 4.6 percent yearly and 1.1 percent on a quarterly basis.
The report also revealed that 37.5 percent of all ready home sales during 2025 were priced less than AED1 million. A total of 95 homes priced above AED30 million were sold, up from 71 during the same period last year. Of these, 32 transactions involved properties exceeding AED50 million.
The citywide average transacted price for ready units during the quarter was AED17,868 per sq m (AED 1,660 per sq ft), up 8.7 percent year-on-year but stable quarterly. Most transacted locations for ready properties were Jumeirah Village Circle, Business Bay and Dubai Marina.
In the fourth quarter of 2025, the Dubai real estate market also witnessed 11,850 mortgage transactions across all asset classes, compared to 16,139 cash transactions of ready properties. The total sales value attributed to mortgage transactions stood at AED29 billion, with cash transactions totalling AED45 billion.
Stay tuned as this line continues to rise from blueprint to bustling reality — and get ready to explore Dubai with even greater ease in the years ahead!
News Source https://economymiddleeast.com/news/dubai-real-estate-prime-property-prices-surge-20-4-percent-amid-sustained-population-growth/
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