Just five years ago, the U.A.E. city recorded only 30 home sales priced at $10 million and above.
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Dubai had a banner year in 2025, logging a record-breaking number of home sales at $10 million and above, according to a report from Knight Frank on Monday.
The U.A.E. city closed out the year with 500 sales valued at $10 million-plus—including 68 homes that sold for more than $25 million, another all-time high—producing a total value of $9.05 billion, a 27.7% increase of 2024’s luxury sales volume of $7.09 billion.
A strong fourth quarter helped propel the market to these record numbers, with 143 homes selling for more than $10 million during the final three months of the year, up from 103 in the third quarter.
Regional and worldwide luxury buyers alike continue to be compelled to buy property in Dubai, “attracted by the high quality of life, world-class amenities and infrastructure, enabled by the government’s ambitious investment programs,” Faisal Durrani, partner and head of research for Knight Frank’s Middle East and North Africa (MENA) region, said in the report.
“Dubai’s meteoric rise as the world’s busiest market for $10 million-plus homes, having increased from just 30 sales in 2020 to 500 by the end of 2025, is best reflected in the emirate’s growing reputation as a magnet for the global elite,” he said.
The tree-shaped man-made island of Palm Jumeirah retained its spot as the most popular community for luxury home buyers, recording 28 sales of homes valued at more than $10 million during the fourth quarter.
The yet-to-be-completed Palm Jebel Ali—which closely resembles the shape of Palm Jumeirah—was close behind with 22 sales. It’s expected to be completed in 2028.
“At 50% larger than its established neighbor Palm Jumeirah, Palm Jebel Ali remains a destination to watch,” said Will McKintosh, regional partner and head of residential for MENA.
“While it will obviously take time to reach the maturity of other established communities, the 2025 sales figures are a welcome indication of its high potential and the growing demand from the wealthiest buyers for prime waterfront property and the luxury Dubai lifestyle.”
The priciest deal of the quarter was for a six-bedroom apartment in Bugatti Residences by Binghatti, within the Business Bay community.
The 47,200-square-foot home sold for AED 550 million (US$149.7 million), setting a U.A.E. sale price record for a penthouse.
The previous record was held by a 22,000-square-foot penthouse at the Como Residences on the Palm Jumeirah that sold for AED 500 million in November 2023.
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The US housing market remains under pressure as high mortgage rates continue to weigh on affordability and demand. Industry leaders say 2026 has been one of the toughest years for home sales, with slower price growth, weaker mortgage activity, and fewer buyers entering the market. However, experts say reduced competition and more price cuts could create opportunities for well-prepared buyers.
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The typically busy spring season for the housing market was a dud, and the summer isn’t looking much brighter.
Housing services companies like Zillow Group and Rocket RKT +3.78% were loud and clear last week on earnings calls: Rocket CEO Varun Krishna called the quarter through June “one of the toughest spring housing markets in years.”
Jeremy Hofmann, Zillow’s chief financial officer, said on a conference call that the company predicted earlier this year that the market for mortgages would be flat. “We actually now think it’s going to be down low-to-mid-single digits,” he said.
The rest of 2026 will remain challenging for mortgage origination volume, says KBW analyst Bose George. The question now is what happens in 2027. “If mortgage rates remain [around] 6.75%, I think that’s going to be challenging even for next year,” he says.
But what’s bad news for mortgage companies could be a positive for bargain hunters. Buyers can expect prices to grow more slowly—or mildly decline—with less competition as long as mortgage rates remain unpredictable.
Mortgage rates at the beginning of the year were solidly below year-ago levels, notes Zillow senior economist Kara Ng. But they surpassed last year’s levels recently, she adds, referencing Freddie Mac’s weekly survey of 30-year fixed mortgage rates. Last week’s reading, at 6.69%, was higher than year-ago levels for the first time in 2026.
“From the affordability point of view, it’s going to get more challenging in the second half of the year,” she says. “And when affordability gets more challenging, that impacts sales and home price appreciation.”
Mortgage application data tracked by the Mortgage Bankers Association has cooled since the beginning of the year. The trade group expects that the number of mortgage originations in the remaining two quarters will lag behind last year’s levels, after exceeding 2025 levels in the first half.
Rocket’s early-stage data—which the company told Barron’s it derives from its brokerage Redfin, demand for its mortgage products, and signs in its servicing portfolio that a homeowner is preparing to refinance or move—“leads us to expect the third quarter mortgage market to be smaller than the second,” Chief Financial Officer Brian Brown, said on the company’s call. He added that such an occurrence is “something the industry has not seen since 2022.”
Prices will be about flat nationally, Ng says. Zillow’s most recent forecast, which shows how values are expected to change in the year ending June 2027, show them dropping in roughly half of the 100 largest U.S. metros for which data is available.
Buyers aren’t rushing in at a time when mortgage costs are rising and unpredictable. But those with the right combination of patience and cash could stand to benefit. “If you are financially qualified to buy a starter home, you are facing less competition and you’re more likely to get a price cut,” Ng says.
