Dubai Property Market Overview

Despite an 18% year-on-year drop in overall sales value to AED 313.5B and a 16% decline in transaction volume, price per square foot increased by 8%, signaling value retention amid reduced activity. Primary market transactions, representing 72% of volume and 69% of value, fell less sharply than resale, which dropped 30% in both sales value and volume, yet resale capital gains surged 64%, reflecting selective investor confidence in existing assets. The divergence between falling transaction volumes and rising prices suggests a tightening supply-demand balance, particularly in resale, where capital gains growth despite volume contraction points to growing scarcity or premium repositioning rather than broad-based market strength.

Mortgage activity reveals contrasting dynamics underscoring financing's growing role: mortgage transaction volume declined 10%, but mortgage value rose 23%, and loan-to-value ratios increased by over 5 percentage points, indicating larger, more leveraged deals. Mortgage-backed purchases now constitute 33% of transactions, up 12%, signaling a shift towards financing despite volume softness. The slower pace of cash transactions (-5%) versus the growth in mortgage activity suggests capital is increasingly flowing through leverage, which could amplify price momentum if credit conditions persist. Investors should prioritize opportunities in primary developments supported by buoyant mortgage uptake and remain cautious on resale assets where volume compression risks overvaluation disconnects. Immediate action should focus on securing leveraged positions in primary projects to capitalize on expanding credit appetite and price resilience.