40% of Emaar's Development Revenue Came from Villas — Why UAE Developers Are Changing Course

Developers in the UAE shift from towers to family homes

The real estate UAE market is shifting under developers' feet as major builders pivot from apartment towers to villas and townhouses aimed at residents. The shift is no accident: recent launches, corporate commentary, and sales data show developers chasing owner-occupiers rather than overseas investors, a strategy our analysis finds both pragmatic and risky.

I have tracked Gulf property cycles for years and this change feels different. It is a strategic response to falling foreign demand since the Iran war began and to a clear structural imbalance in unit types in Dubai and other emirates. The implications matter for buyers, investors and expats deciding whether to sit, sell or buy in coming quarters.

Why developers are betting on villas and townhouses

Several large UAE developers have said publicly that they are increasing the share of villas and townhouses in new masterplans. The reasoning is straightforward: villas are typically purchased by residents, while apartments are often bought by international investors. In a market shaken by geopolitical uncertainty, resident demand is seen as more dependable.

Key industry statements and moves include:

• Arada's CEO Ahmed Alkhoshaibi has said "To sell in this time, there are more local buyers than international buyers." He notes the volume of demand now sits with people who intend to live in the property they buy.
• Betterhomes chief executive Louis Harding flagged the supply imbalance in Dubai: about 84% of supply is apartments, 11% townhouses and only 5% villas. Harding expects villas and townhouses to remain robust because established villa communities are not being replaced and townhouses are the fastest-growing category.
• Aldar, Abu Dhabi’s largest developer, confirmed plans for a new Dubai masterplan that is "predominantly townhouses" and said it will launch more townhouse stock on Yas Island.
• Emaar placed ultra-high-end villas at the centre of a recent flagship project and reported that villas and townhouses made up just over 40% of its UAE development revenue in the first quarter, even though they account for a small fraction of total units delivered against the company’s apartment-heavy pipeline.
• Binghatti, previously focused on off-plan apartments, launched its first villa and townhouse community, Tilal, and explicitly pitched it as addressing demand for "large-format family living."

Together these moves show a deliberate, market-wide rebalancing: developers want products that match resident demand rather than chase investors who may step back when uncertainty rises.

What the numbers say about demand and supply

Data from the Dubai Land Department and industry players underline why the change makes sense.

• Between 28 February and 28 June this year, around 50,000 homes sold in Dubai, a 25% drop versus the same period last year, according to the Land Department.
• Supply composition in Dubai is heavily skewed toward apartments: 84% apartments, 11% townhouses, 5% villas, per Betterhomes.
• Despite low unit share, villas and townhouses delivered outsized revenue for established developers; Emaar reported over 40% of UAE development revenue from villas and townhouses in Q1.

This combination — falling overall sales volume, apartment-heavy supply and disproportionate revenue from fewer villa units — explains why developers are recalibrating unit mixes. Apartments face a higher risk of price reductions because supply outstrips demand; family homes have stronger resident demand and therefore better price resilience.

What this means for buyers and investors

The practical implications differ for owner-occupiers, buy-to-let investors and speculators.

• For owner-occupiers (families and long-term residents): this is a chance to secure homes in newly masterplanned communities that developers are prioritising. Townhouses often offer a compromise between villa living and apartment affordability.

• For buy-to-let investors: villas and townhouses can provide steadier rental demand from families and professionals who prefer long-term tenancies, but yield profiles and liquidity can vary widely depending on location.

• For speculative investors: apartments are now the segment most exposed to price corrections because of the oversupply relative to buyers. Off-plan apartments that rely on foreign purchasers are more vulnerable to demand swings.

Practical points to consider before you buy:

• Check the unit mix and absorption rates in the micro-market you are examining. A townhouse in a selling-out community is different from one in a new suburb still filling up.
• Examine a developer’s track record for delivery and after-sales service. Developers that can move from apartments into villas need operational experience in low-density product, or else quality and completion risk rises.
• Consider liquidity: villas sell less frequently than apartments in many markets; if you might need to exit quickly, factor that into price expectations.
• Factor in running costs. Villas typically have higher maintenance, landscaping and service fees compared with apartments.

Risks and headwinds developers and buyers should not ignore

A pivot toward villas and townhouses is not a guaranteed win. The move mitigates one risk but exposes developers and buyers to others.

• Execution risk: developers used to building high-rise apartments must adapt to lower-density construction, different supply chains and more complex infrastructure layout for communities. Poor execution can lead to delays and cost overruns.
• Price competition: as more developers chase the same resident buyers, the supply of townhouses and villas will rise from a low base; competition can compress margins and returns for developers and restrain capital appreciation for buyers.
• Financing and affordability: mortgage availability and lending terms determine resident buyers' purchasing power.