Dubai’s off-plan property market has been booming for several years, but as demand rises and inventory shrinks, many are now asking: is the market heading towards a supply crunch? Espace Real Estate recently joined a live radio segment to unpack the current trends, challenges, and forecasts shaping Dubai’s off-plan landscape.
Jake Matthews-Huppert, Sales Director for Off-Plan Investment at Espace Real Estate, shared key insights from their latest Off-Plan Market Report for May. According to Jake, the total value of off-plan transactions reached AED 25 billion in May 2025, marking a 13% increase compared to May of the previous year. However, while transaction value has climbed, transaction volumes actually dipped slightly, with around 10,000 units sold—down by 6% year-on-year.
When breaking down the type of inventory, the picture becomes even clearer. Approximately 94% of off-plan supply is concentrated in apartments, while townhouses make up just 5% and villas a mere 1%. This stark imbalance has left the villa and townhouse segment heavily undersupplied. In May 2025, just 574 villa and townhouse transactions took place in the off-plan space, a staggering 49% drop from the previous year. Jake explained that this shortage isn’t driven by lack of demand but by limited launches. Developers are often releasing new master communities in staggered phases, restricting supply even further.
One of the main reasons behind this focus on apartment developments is the scarcity of land suitable for building villa and townhouse communities, especially in central locations. As Jake noted, developers can build upwards more efficiently in prime areas, maximising the number of units by focusing on apartments rather than larger, low-density homes. Projects in areas like Jumeirah Islands, Sobha Central, and the new Jebel Ali Racecourse typically lean heavily toward apartment towers for this reason.
Despite the heavy apartment bias, the demand for off-plan properties remains robust. Buyers are increasingly willing to purchase off-plan homes for personal use, even if the handover is two to four years away. Location, the reputation of the developer, and the overall infrastructure surrounding a project remain the key decision factors for today’s investors and homeowners. Jake specifically highlighted Expo City as one of the most promising apartment markets, with strong growth potential expected in the coming years. He also pointed out that unique selling points like exceptional views or well-designed layouts can significantly boost long-term appreciation and rental yields.
The conversation also touched on Dubai’s evolving regulatory landscape, which has become a critical factor for international investors. Jake noted that the introduction of construction-linked payment plans has strengthened investor confidence. These payment schedules, which are tied to verified construction milestones tracked by the Dubai Land Department, ensure that buyers only pay when measurable progress is achieved. Investors can even monitor these milestones themselves via official apps. This increased transparency has helped the off-plan market build significant trust, especially among overseas buyers.
With the rapid influx of new developers entering the Dubai market, the choice can seem overwhelming. Jake explained that Espace Real Estate remains selective, typically focusing on the top 15 to 20 developers, with particular emphasis on those with proven track records, government backing, or successful previous phases of the same project. While established names dominate, Jake acknowledged that new international developers, including some from the UK with award-winning reputations, are entering Dubai’s market with strong credibility. These developers may not yet have local portfolios, but their global experience shouldn’t be overlooked.
The discussion also addressed the common perception that villas and townhouses are becoming unaffordable. While prices in the secondary market have risen significantly, Jake noted that off-plan still offers accessible entry points for buyers, particularly those willing to consider emerging communities further from central Dubai. This trend of buyers exploring more distant areas is becoming more common, allowing them to find better value for money.
Looking ahead, Jake confirmed that some major developers are intentionally holding back large project launches until after the summer. However, opportunities will still be available during the quieter months, with some smaller developers expected to offer summer deals. For buyers prepared to act, the summer may actually present a chance to secure favourable terms.
Thinking Dubai real estate? You can browse our properties for sale at Espace
As a truly customer-centric real estate agency, we offer a range of related services that are designed to make your property journey stress-free and successful from start to end.
