UAE’s Real Estate Continue to Thrive in Q2 2025, Driven by Strong Fundamentals
CBRE Middle East, the global leader in commercial real estate services, released its latest edition of the UAE Real Estate Market Review for the second quarter of 2025, highlighting the resilient performance of the UAE’s real estate market. The UAE’s economy continues to demonstrate robust growth, with GDP projected to grow 5.1% in 2025, up from 3.8% in 2024. This positive trajectory is fueled by a rebound in oil production, strategic trade initiatives, and a thriving tourism sector, which saw a 7% year-on-year increase in international visitors to Dubai from January to May 2025. Investment in advanced technologies is also bolstering growth. While rising regional geopolitical tensions present potential downside risks, the UAE’s market fundamentals remain strong.
In a move to further support its residents and to further grow the real estate market, Dubai has launched a First-Time Home Buyer Program, offering incentives like preferential pricing and flexible payment options. This initiative aims to stimulate end-user demand and encourage homeownership.
CBRE releases its UAE Real Estate Market Review for Q2 2025
Office Market: Strong Demand, Limited Supply
The Dubai office market remains strong, driven by tight supply and sustained demand, particularly from the Banking & Finance and Tech sectors. Average office rentals have increased significantly, rising by more than 20% year-on-year. Abu Dhabi’s office market is also flourishing, attracting new international businesses. With near-full occupancy rates and rising rental rates, both markets reflect the strength of demand.
Residential Market: Growth and Transformation
Dubai’s residential market shows continued growth in Q2, with property values rising nearly 14% annually to June 2025. While the market is becoming more segmented, with some communities showing stabilization, others, particularly premium areas, continue to experience significant appreciation, indicating market rebalancing. Abu Dhabi also saw strong performance, with average apartment values up 18% year-on-year and villa prices up nearly 14%.
The first half of 2025 saw Dubai’s residential sector experience a strong surge in transactional activity. Total transaction volumes surged by 23% year-on-year, supported by strong off-plan sales. The total value of residential sales reached AED 270 billion. The UAE is poised to attract a record number of millionaire migrants in 2025, fueling demand, particularly in the luxury and off-plan sectors.
Hospitality & Retail: Thriving Sectors
The UAE’s tourism sector is a key driver of economic diversification, projected to contribute AED 267.5 billion to GDP in 2025. Dubai leads the way with strong increases in international visitors and hotel performance. The retail market is also demonstrating resilience, with sustained demand and rising rents. New market entrants, like Primark, and the expansion of Dubai’s social gaming scene with venues like BrewDog and Kapitol, point to ongoing dynamism.
Industrial Market: Resilience and Growth
The UAE’s industrial market is attracting increasing investments, with a positive outlook for manufacturing and related activities. Strong rental growth and high occupancy rates indicate a landlord-favored market. The growing interest from global investors suggests potential for future development and a more liquid investment market in Grade A logistics assets.
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