The UAE property market continues to record exceptional growth, with Dubai leading the way. Data for the first half of 2025 shows record-breaking activity across the emirate, while Abu Dhabi is staging a strong rebound. A major wave of new supply is expected from 2025 to 2027, poised to reshape market conditions.

Dubai’s Record-Breaking Performance
Dubai posted its strongest-ever quarter between April and June 2025, achieving 53,252 transactions valued at AED 184.3 billion (AUD 78.8 billion). Across the first six months, the emirate recorded 98,726 property transactions worth AED 327 billion (AUD 139.3 billion), reinforcing its position as one of the world’s most active real estate markets.

Average rental yields currently sit at 7.4%, rising to 9.4% in affordable communities, making Dubai highly attractive for investors seeking income-generating assets. A total of 94,717 investors, mostly international, invested AED 326 billion (AUD $138.9 billion) during this period.

Abu Dhabi Rebounds
While Abu Dhabi experienced a 35% decline in Q1 transactions, the capital quickly recovered in Q2 with a 10% rise in sales and a 48% increase in transaction value, highlighting renewed investor confidence. Combined, Dubai and Abu Dhabi now account for roughly 90% of peak market activity, indicating a strong seller’s market.

High Rental Yields Drive Investment
Affordable communities continue to deliver the strongest returns, with yields above 7.5%. Key yield leaders include:

• Dubai Investment Park – 9.44%

• International City – 9.10%

• Arjan – 7.90%

• Discovery Gardens – 7.77%

• Jumeirah Village Circle – 7.59%

Lower entry prices, such as AED 725 per sq ft (AUD 310 per sq ft) in International City, continue to fuel high investor activity.

Emerging Areas Show Robust Price Growth
From August 2024 to August 2025, communities recording significant growth include:

• Barsha Heights

• Dubai Internet City

• Emirates Hills 2

• Mohammad Bin Rashid Gardens (Dubai)

• Dubai Waterfront

• Sharjah Waterfront City (Sharjah)

• Al Majaz (Sharjah)

• Gateway Residences (Ras Al Khaimah)

Drivers of growth include redevelopment projects, tech precinct expansion, mixed-use developments, and increasing demand for high-quality residential spaces. Foreign buyers dominate, accounting for over 70% of total investment value, while rising participation from UAE residents and women investors is reshaping market demographics.

A Major Supply Wave Ahead
Property Finder forecasts a three-year supply pipeline of 240,000 units:

• 2025: 90,000 units

• 2026: 120,000 units

• 2027: 30,000 units

This represents a 20% increase in Dubai’s housing stock, expected to shift market conditions toward buyers starting in 2026.

Strategic Outlook 2025–2027

• Late 2025: Seller-driven market; investors encouraged to act early, focusing on communities offering yields above 9% or competitively priced off-plan projects.

• Early 2026: Arrival of new stock likely to stabilize prices, giving buyers more negotiating power.

• Late 2026–2027: Market projected to enter a stable phase; investors should prioritize mature, well-connected communities to maintain long-term rental demand and value.

A balanced Dubai-focused portfolio may include 60% ready homes and 40% off-plan units, with properties priced under AED 1,500 per sq ft (AUD 640 per sq ft) delivering strong income potential.

Outlook for UAE Property
Despite expected moderation in certain segments, the UAE remains one of the most active and stable real estate markets globally. Record transaction volumes, strong rental yields, high foreign participation, and a substantial supply pipeline all indicate that the next two years present significant opportunities for strategic investors.