The Big Short Series | The Double Downturn: Rentals & Resales in 2025 | Episode 5

A clearer view of Dubai real estate as the cycle begins to shift

Episode Five of The Big Short by AirDXB examines the current state of the Dubai real estate market through data, market commentary and the broader economic backdrop. The city has experienced several years of rapid expansion driven by record investment and strong demand, but the latest indicators show that conditions are becoming more selective. This is a market that remains active, but the pace and balance of activity are changing.

Sales sentiment in the media

Recent reporting across Khaleej Times, Bloomberg, The Financial Times and The Telegraph reflects a noticeable change in tone. After a long period of high confidence, headlines now highlight concerns around slowing momentum, uneven growth, rising supply and a correction. Much of the remaining strength is centred on off plan sales rather than the resale segment, which points to increasing caution among end users.

The message is clear. The Dubai real estate market is performing, but it is no longer accelerating across all areas.

Sales volume and value

Property Monitor data shows the early signs of a slowdown.

Year on year from October 2024 to October 2025 sales value and volume fell, reflecting softening demand and smaller average transaction sizes. Check out The Big Short Episode Five for details including month on month, quarter on quarter and year on year changes.

Other major agencies including Allsopp and Allsopp, Betterhomes, Espace and Cavendish Maxwell report the same pattern.

Market breakdown by area and property type

Apartment volume year on year Q3 in key communities | Source: Espace‍

• Downtown: down 24%
• Dubai Marina: down 26%
• Palm Jumeirah: down 22%

Only areas with large handover activity such as Jumeirah Village Circle and Dubai Creek Harbour recorded increases.

Villa and townhouse markets have also begun to soften after years of strong performance.  

• Emirates Hills down 74%
• Palm Jumeirah down 53%
• Arabian Ranches 3 down 17%

Ultra high value outliers and data distortion

Record sale announcements create strong headlines but often distort the wider picture. Property Monitor shows that in August 2025 the total transaction value reached AED 42 billion, partly influenced by a single AED 350 million villa sale in La Mer. In September a single AED 200 million villa in the World Islands influenced the AED 44 billion total.

This is not unusual. Since early 2024 an average of more than 400 sales above AED 10 million occur each month. It is important for investors to understand that these high value transactions do not reflect the mainstream market where more than one quarter of sales fall between AED 1 million and AED 1.5 million.

The resale market

The weakest segment of the Dubai real estate market is resale.

From Q3 2024 to Q3 2025 resale transactions fell by 9.5%.
Quarter on quarter from Q2 to Q3 2025 resale transactions fell by 19.8%.

Off plan absorbs most of the market activity. This indicates a market driven more by future supply and investor speculation than by current end user demand. For investors considering property in Dubai, this shift highlights the importance of selecting assets with strong rental fundamentals rather than relying on capital appreciation alone.

The rental market

Rental conditions have begun to ease after three years of sustained rises. According to coverage from Gulf News, The National and What’s On, the increase in supply has created more choice for tenants and slowed rising rents.

An important trend is the rise in rental disputes. Takeem reports 45,000 disputes in Q2 2025 alone, with non payment the most common issue. This is a significant consideration for landlords, particularly those operating in the Short Let Market, where affordability pressures can influence occupancy and yields.

Key note discussed in Episode 5 is how Dubai population continues to rise, increasing by 5.4% year on year according to Dubai population clock, yet both rental and sales activity have declined according to Property Monitor.

For a complete breakdown of Dubai real estate trends, including sales, rentals, resale activity and market insights by area, watch The Big Short Episode Five by AirDXB and get the full picture.