Dubai’s real estate market is experiencing a substantial rise, propelled by evolving preferences among investors and tenants. In February 2025, the market recorded a remarkable 35% year-on-year increase in transactions, with a total of 16,099 deals, alongside a substantial 55% rise in total market value, reaching AED 51.1 billion.

Apartment Preferences

A notable 71% of apartment buyers are gravitating toward smaller units:

• One-bedroom apartments: 34%
• Two-bedroom apartments: 37%
• Studios: Stable at 13%

Prime locations such as Dubai Marina, Downtown Dubai, and Palm Jumeirah are dominating searches, reflecting investors’ emphasis on luxury and connectivity.

Villa Preferences

The demand for larger villa spaces is evident, with 86% of seekers interested in:

• Three-bedroom villas: 39%
• Four-bedroom or larger villas: 47%

Areas like Dubai Hills Estate, Damac Hills 2, and Al Furjan are particularly sought after, indicating a preference for community amenities and affordability.

Tenant Trends

The rental market is also evolving:

• Furnished apartments: 64% of renters now opt for these, up from 45% in 2024, driven by expatriates seeking convenience.
• Apartment preferences: 56% focus on studios (20%) or one-bedroom units (36%), highlighting budget considerations.

Rental hotspots include Jumeirah Village Circle (JVC), Deira, and Business Bay. For villa rentals, while unfurnished options still dominate at 58%, demand for furnished villas has risen to 42%, up from 36% the previous year. Notably, 80% of villa renters seek three-bedroom (41%) or larger properties, especially in areas like Jumeirah, Dubai Hills Estate, and Al Furjan.

Off-Plan Market Boom

The off-plan market is thriving, with transaction values soaring 57% year-on-year to AED 20.5 billion. Key areas driving this growth include Wadi Al Safa 5 and Al Yufrah 1, with significant sales of AED 2.2 billion and AED 1.4 billion, respectively. The ready market remains robust, with existing property transactions rising by 27% to 6,997, led by high-profile properties such as the Burj Khalifa and Al Yelayiss.

Expert Insights

Cherif Sleiman, Chief Revenue Officer at Property Finder, observes that Dubai’s market is maturing, with investor and tenant preferences shaping inventory strategies. He notes that the rise in furnished apartments and off-plan investments reflects Dubai’s appeal to global talent and entrepreneurs seeking turnkey solutions. Simultaneously, villa demand underscores the city’s growing reputation as a family destination. Regulatory initiatives, like streamlined business setups, are amplifying this momentum, making Dubai a magnet for long-term capital.

Implications for Stakeholders

This evolving market landscape carries significant implications:

• Investors: Balancing high-yield opportunities in studios and one-bedroom apartments with luxury villa projects in emerging suburbs.
• Tenants: Increasingly valuing flexibility, with furnished units minimizing relocation costs for transient professionals.

Developers and landlords must adapt to this polarized demand, focusing on compact, ready-to-move-in apartments versus spacious, customizable villas.

In summary, Dubai’s real estate market is witnessing a dynamic shift, with changing preferences among investors and tenants driving growth across various segments.