Real Estate
Dubai Real Estate Digest: May 2025
The catalogue of the best properties of June 2025 as a free bonus at the end of the article.
06/05/2025
4 minutes
Dubai Real Estate Digest: May 2025
May brought two key updates that, in our opinion, define the direction of Dubai's real estate market.The first — the market is starting to show signs of maturity: growth continues, but more and more factors indicate that it is approaching a local peak.
The second — real estate tokenization has moved from theory to practice, and now officially licensed platforms in Dubai offer digital shares in properties.
We’ve broken down both topics — with numbers, risks, and conclusions.
At the end of the digest — a catalogue of liquid projects for different budgets, from small investments to comprehensive income-oriented purchase strategies.
A New Market Cycle
Main points:
The past month has been another period of growth for Dubai’s real estate market — but more and more data suggests the market is approaching its local peak. This isn’t a signal to panic, but rather to calculate carefully: in the face of growing supply and limited demand, an adjustment looks inevitable and even healthy.
Overall dynamics
Despite a slight correction in January (-0.57% vs. December), the market has shown steady growth: on average +1.9% month to month. As of the end of May:
• Average price: 1,565 AED/ft² or ≈ 4,586 USD/m²Despite a slight correction in January (-0.57% vs. December), the market has shown steady growth: on average +1.9% month to month. As of the end of May:
Where is the market headed?
Several factors point to an upcoming natural correction of -7-10% in some low-liquidity areas:
• Supply growth is noticeably outpacing Dubai’s annual population increase
• Already in 2026, about 110,000 new units will come to market (three times more than in 2022)
• Increased construction costs of about 450 AED/ft²
• Developers’ IRR has dropped by 10% (previously around 25%, now around 15%)
• Rising land costs are not being offset by end-sale price increases
• Supply growth is noticeably outpacing Dubai’s annual population increase
• Already in 2026, about 110,000 new units will come to market (three times more than in 2022)
• Increased construction costs of about 450 AED/ft²
• Developers’ IRR has dropped by 10% (previously around 25%, now around 15%)
• Rising land costs are not being offset by end-sale price increases
What’s happening is a healthy process that increases competition and improves product quality.
Recommendations in the current situation:
• Find liquid projects (link to the catalogue is below)
• Look at new growth areas — commercial real estate, offices, villas, Dubai South, and neighboring emirates
• Prepare alternative scenarios — flipping at handover doesn’t always work due to competition, renting for 1–2 years after handover to reduce competition — more important
For investors — choose projects with caution, handover flips aren’t always effective. For buyers — expect local dips in low-liquidity areas. The current situation is not a downturn, but a sign of a new phase of market maturity. It’s becoming more calculated, focused on quality, and long-term value.
TokenizationIn 2025, real estate tokenization moved from a fashionable theory to practical reality. In Dubai, there are already officially registered platforms where property is divided into thousands of tokens and sold via blockchain infrastructure. This is not just marketing — it’s a legitimate mechanism approved by the Dubai Land Department (DLD).
How does it work?
• A property is divided into shares — for example, 1,000 tokens at 2,000 AED each
• Each share is a digital token recorded on the blockchain
• Buying tokens gives the right to a share of rental income or resale profits
• The whole structure is already in place, currently there are 2 platforms.
• Each share is a digital token recorded on the blockchain
• Buying tokens gives the right to a share of rental income or resale profits
• The whole structure is already in place, currently there are 2 platforms.
What do they promise?
• Accessibility: from 2,000 AED you’re already a “property owner” in Dubai
• Liquidity: the ability to sell the token on the secondary market• Accessibility: from 2,000 AED you’re already a “property owner” in Dubai
• Transparency: blockchain, smart contracts, share accounting
• High returns: 8–15% annually in hard currency — according to their claims
In practice
For the first project launched in late May 2025, properties are listed 15–25% above market price to “fit” the tokenization commission model. Returns do not include expenses. The management company charges for token issuance, administration, maintenance, marketing, etc. Ultimately, net returns may be 3–6%, unlike the claimed 12–15%.
For the first project launched in late May 2025, properties are listed 15–25% above market price to “fit” the tokenization commission model. Returns do not include expenses. The management company charges for token issuance, administration, maintenance, marketing, etc. Ultimately, net returns may be 3–6%, unlike the claimed 12–15%.
Tokenization is not a revolution, but another format of ownership. It’s interesting, but not universal. It’s not an alternative to buying an apartment, but an option for micro-investments with higher risks. And, like any investment tool, it requires calculation, not faith.
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