In August, Dubai‘s real estate landscape showcased remarkable growth, with property transactions soaring to AED42.4 billion. This surge comes as an increasing number of tenants opt for homeownership, marking a significant shift in market dynamics. According to a recent report by Engel & Völkers Middle East, the rise in home purchases reflects the growing confidence of residents in Dubai real estate, viewing it as a viable option for long-term residence and investment.
Trends in Property Transactions
Engel & Völkers highlighted a staggering 22 percent increase in secondary market sales during the first eight months of 2025 compared to the same period in 2024. This trend indicates that more residents are looking to turn their rental situations into ownership, as many families and young professionals seek the stability and benefits that come with owning property in a burgeoning market.
Drivers of Homeownership
As Daniel Hadi, CEO of Engel & Völkers Middle East, stated, “For many tenants, ownership is no longer aspirational; it’s becoming the preferred choice for long-term security and value creation.” In August alone, Dubai saw 17,879 property transactions, marking a significant 17 percent increase in volume and a 12 percent rise in value from the previous year. Off-plan sales emerged as the dominant force, rising 25 percent year-on-year and making up nearly three-quarters of total transactions. The secondary market also thrived, bolstered by strong end-user demand.
Shifting Market Dynamics
Family homes are leading this market boom, with four-bedroom properties witnessing a 70 percent increase in sales, while five-bedroom or larger homes rose by 63 percent year-on-year. Property prices have followed suit, climbing to AED1,664 per square foot in August, a 16.3 percent increase compared to the same month last year. Some communities have experienced substantial growth, including Victory Heights, Dubai Hills Estate, and Arabian Ranches, indicating a thriving demand for villas and luxury living arrangements.
Investment Yields and Future Outlook
The average rental yield remained stable at 6.76 percent overall in August, with apartments yielding 7.12 percent and villas at 4.92 percent. Notably, these figures outpace returns seen in other major global markets like London and New York. This attractive yield environment is supported by a rapidly growing population, new business formations, and limited rental supply, further driving interest in Dubai real estate.
Despite a slight decline in leasing volumes, with new contracts down by 14 percent, families are increasingly favoring home purchases over renting, particularly within the luxury segment. The market is bolstered by a mix of local residents and international investors from countries such as India, the UK, Germany, Egypt, and China, contributing to the off-plan purchase momentum while residents enhance the resale market.
“Dubai’s market today is being fueled by a dual dynamic: strong global investment flows into off-plan projects and a clear shift among residents toward homeownership. August’s activity reflects both the city’s international appeal and the growing number of long-term residents putting down roots,” Hadi noted. Engel & Völkers remains optimistic, anticipating that this upward momentum will extend into the final quarter of 2025, reflecting an enduring interest in Dubai real estate as more tenants transition to ownership.
As Mr. Hadi concluded, “Dubai’s property market is no longer just about short-term investment cycles. It is increasingly about residents choosing to establish roots here — buying homes for security, lifestyle, and long-term value creation. This shift is set to define the next phase of the city’s real estate story.”