Dubai Tenants Shift from Renting to Buying as August Property Transactions Hit AED 42.4B

(MENAFN- Clickon Group Mena) Engel & Völkers Middle East, a leader in premium residential and commercial real estate services, has reported a decisive shift in the city’s residential property market, as more tenants are choosing to purchase homes rather than remain in the rental cycle. The trend is underscored by a 22% increase in secondary market sales in the first eight months of 2025 compared to the same period last year, reflecting growing confidence among residents who increasingly view Dubai as a permanent base.

The transition is particularly evident among families and young professionals who see property ownership as a way to build equity, secure long-term stability, and escape escalating rental costs. “For many tenants, ownership is no longer aspirational; it’s becoming the preferred choice for long-term security and value creation,” observed Daniel Hadi, CEO of Engel & Völkers Middle East.

Dubai’s residential market recorded another milestone in August, with 17,879 transactions worth AED 42.4 billion — a 17% increase in volume and 12% rise in value year-on-year, according to Engel & Völkers. Off-plan sales continued to dominate, rising 25% YOY and accounting for nearly three-quarters of all transactions, while the secondary market maintained strong momentum on the back of end-user demand. Larger family homes led the way, with sales of four-bedroom properties climbing 70% and those of five-bedroom or larger properties up 63% compared to last year.

Average property prices also continued their upward trajectory. According to Property Monitor, prices reached AED 1,664 per square foot in August, up 16.3% year-on-year. Villas saw particularly sharp gains in lifestyle-led communities such as Victory Heights (+37.0% YOY), Dubai Hills Estate (+26.0% YOY), and Arabian Ranches (+23.2% YOY). Apartments also recorded healthy increases in many communities, including Jumeirah Village Triangle (+29.3% YOY) and Jumeirah Village Circle (+17.0% YOY).

Rental yields remain a cornerstone of Dubai’s appeal for global investors. Average gross yields in August stood at 6.76% overall, with apartments at 7.12% and villas at 4.92%. Despite sustained price increases, yields remain among the highest of any global city — comfortably outpacing prime markets such as London (3–5%), Singapore (3–4%), and New York (5–7%). This resilience is supported by Dubai’s growing population, new company formations, and limited supply of quality rental stock.

Overall leasing volumes declined 4% year-to-date, with new contracts falling 14% but renewals edging up 2.6%. The trend is especially pronounced in the luxury segment, where large villa leases fell by double digits — an indicator that many families are choosing to buy rather than rent.

Demand continues to be broad-based, spanning both UAE residents and international buyers from Europe, the Middle East, and Asia. A diverse range of nationalities, including Indian, British, German, Egyptian, and Chinese remain active in the off-plan segment, while residents are driving the surge in the resale market. Mortgages remain a key enabler, with loan-to-value ratios of 70–80% and leading interest rates around 3.9%, which are competitive by global standards. Cash transactions and developer-backed payment plans also continue to fuel momentum in off-plan sales.

“Dubai’s market today is being fueled by a dual dynamic: strong global investment flows into off-plan projects and a clear shift among residents toward homeownership,” added Hadi. “August’s activity reflects both the city’s international appeal and the growing number of long-term residents putting down roots.”

Engel & Völkers expects this dual-market momentum to continue into the final quarter of 2025, with off-plan sales driven by thriving developer activity, flexible payment plans and international demand, and the resale market supported by population growth, competitive mortgages, and tenants making the transition into ownership.

“Dubai’s property market is no longer just about short-term investment cycles. It is increasingly about residents choosing to establish roots here — buying homes for security, lifestyle, and long-term value creation. This shift is set to define the next phase of the city’s real estate story,” concluded Hadi.
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