Dubai’s real estate market is displaying mixed trends, with strong long-term demand continuing across key residential segments even as geopolitical tensions and seasonal factors slow transaction activity.
According to market data, Dubai South recorded the highest residential property transaction volumes in the emirate for the third consecutive month in May. The area registered 1,357 sales transactions worth AED 1.6 billion, representing a 15.9 percent increase compared with April.
Residential sales activity in Dubai South has risen by more than 36 percent since the end of February, driven largely by sustained demand in the off-plan market. Across Dubai, property sales reached 10,281 transactions valued at AED 28.9 billion during May, highlighting continued investor and end-user interest.
However, brokers say the market has recently begun to cool in some segments.
Properties in certain parts of Dubai are reportedly selling for up to 20 percent below asking prices as buyers gain leverage amid regional geopolitical uncertainty and the annual summer exodus. Transaction volumes have also softened as some prospective purchasers adopt a wait-and-see approach.
The slowdown has been particularly noticeable in the luxury and high-end property segment, where buyers are taking more time before committing to major investments.
Demand Shifts Toward Larger Homes
Despite the short-term slowdown, demand remains strong for larger residential properties.
Market data shows that ready-sale apartments continued to attract interest across most price ranges, with larger units outperforming smaller homes. Inquiries for three-bedroom and larger apartments recovered to 79 percent of pre-conflict levels.
The villa segment demonstrated even greater resilience. Demand for five-bedroom villas reached 98 percent of pre-conflict levels, while inquiries for six-bedroom and larger villas exceeded previous benchmarks at 107 percent. Four-bedroom villas also maintained strong interest at 92 percent.
Analysts say these figures reflect growing demand from families and long-term residents seeking larger living spaces, privacy, and established communities.
Off-Plan Market Continues to Attract Investors
The off-plan segment remains a key driver of Dubai’s property market.
One notable example is Casagrand Hermina, the first UAE project launched by developer Casagrand. The development recently crossed the 50 percent sales milestone, highlighting continued investor confidence in established developers with strong delivery records.
According to the company, buyers have come from a diverse range of markets, including the UAE, GCC countries, India, Europe, Canada, and the United States.
The project remains on schedule for completion in the second quarter of 2028.
Outlook
While geopolitical concerns and seasonal trends are creating short-term headwinds, the underlying fundamentals of Dubai’s real estate market remain strong. Demand for family-sized homes, established communities, and quality off-plan developments continues to support the market, even as buyers become more selective and price-conscious.
