Dubai's Luxury Property Market Continues to Soar in Q2 2025
Dubai's high-end real estate market saw a significant surge in the second quarter of 2025, with sales of homes priced above $10 million reaching $2.6 billion, according to Knight Frank.
DubaiLuxury PropertyReal EstateKnight FrankMarket TrendsReal EstateJul 08, 2025
Sales of homes priced above $10 million surged to $2.6 billion between April and June, according to researcher Knight Frank. The figure marks a 37% increase from the first quarter and a 63% rise compared to the same period last year.
A total of 143 transactions were recorded in the quarter, up 52% year-over-year, including 22 sales above the $25 million mark. The market’s strength came despite the 12-day war between Israel and Iran, which eventually drew in the US. Fears of escalation briefly brought Dubai’s property market to a near standstill, brokers told Bloomberg News. The quarter was also marked by sweeping tariffs announced by President Donald Trump that rattled global markets.
On average, prices across 10 luxury neighborhoods rose 18% from a year ago but remained nearly unchanged from the first quarter. “This indicates that rising sales volumes and healthy market activity, as opposed to cost inflation, underlie the growth in total sales value,” the report said.
In the $10 million-and-above category, apartment sales outpaced villas for the first time since the second quarter of 2023. A total of 80 apartments were sold, compared to 63 villas or single-family homes.
Demand for Dubai property has boomed since 2020, driven by the government’s handling of the pandemic and liberal visa policies that attracted foreign buyers. The luxury end of the emirate’s real estate market — including waterfront villas on the city’s artificial palm-shaped islands — has benefited from an influx of wealthy expatriates.
To be sure, analysts have started to warn that city-wide property prices face multiple risks after rising by about 70% over the past four years. Fitch Ratings, for one, forecasts a “moderate correction” in late 2025 into 2026, citing a wave of new supply.
That said, the share of homes resold within 12 months of purchase fell to around 5% in the second quarter, down from as high as 25% in 2008, according to Knight Frank. The shift underscores a change in the buyer mix, with most investors now holding on to properties rather than flipping them.
Frequently Asked Questions
What is the current state of Dubai's luxury property market?
Dubai's luxury property market has seen a significant surge in the second quarter of 2025, with sales of homes priced above $10 million reaching $2.6 billion, marking a 37% increase from the first quarter and a 63% rise compared to the same period last year.
How did geopolitical tensions affect the market?
Despite the 12-day war between Israel and Iran and the sweeping tariffs announced by President Donald Trump, the market remained resilient, with fears of escalation briefly pausing the property market but not derailing the overall trend.
What types of properties are driving the market?
In the $10 million-and-above category, apartment sales outpaced villas for the first time since the second quarter of 2023, with 80 apartments sold compared to 63 villas or single-family homes.
What factors are driving demand for Dubai property?
Demand for Dubai property has been driven by the government’s handling of the pandemic, liberal visa policies, and an influx of wealthy expatriates, particularly in the luxury end of the market, including waterfront villas on the city’s artificial palm-shaped islands.
What risks does the market face in the future?
Analysts have warned that city-wide property prices face multiple risks after rising by about 70% over the past four years. Fitch Ratings forecasts a ‘moderate correction’ in late 2025 into 2026, citing a wave of new supply.
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