Prime Highlights:
- Dubai’s property market is set for an orderly adjustment after four years of rapid growth, benefiting buyers and tenants with more choices and stable rents.
- Luxury and prime properties are expected to retain their value, while mid-market apartments may face pressure from new supply.
Key Facts:
- Top developers like Emaar have order backlogs of Dh129 billion, and the six largest developers earned Dh46 billion in profits in 2024.
- Dubai’s population crossed four million in 2025, with property supply expected to rise by 16 per cent, compared to population growth of just 5 per cent.
Key Background:
Dubai’s property market, which has seen four years of rapid growth, is entering a period of stabilization as new housing supply rises and demand slows. Experts expect an orderly adjustment over the next two years, which could benefit residents and buyers.
Ratings agencies Moody’s and Fitch predict a large number of new homes between 2025 and 2027. Moody’s expects more than 150,000 units, while Fitch estimates nearly 250,000, with around 120,000 ready in 2026 alone. Dubai’s housing supply is set to rise by about 16 per cent, while the population is expected to grow only 5 per cent. Property values rose nearly 60 per cent from 2022 to early 2025, helped by foreign investment, higher incomes, and more people moving to Dubai with long-term visas.
Demand is still strong. Dubai has approximately four million inhabitants in 2025, smaller households, more expatriates, and more than 80,000 rich inhabitants. The luxury sector is still active, and over 590 homes priced above Dh20 million were sold in the first quarter of 2025. Analysts believe that luxury and prime property will maintain their value, whereas the mid-end apartments will be more exposed to new supply.
The market is slowing. Property prices kept rising in 2024, but rental growth fell to 8.5 per cent in May 2025, down from over 21 per cent the year before. Higher interest rates made mortgages less affordable, prompting buyers to act more cautiously.
Experts believe that the market adjustment might be beneficial to the buyers and tenants, as they will have more options, will be able to bargain better, and will not suffer fluctuations in rent. Investors will be forced to be careful; however, the rebalancing will ensure that the real estate market in Dubai becomes more stable, benefiting both the residents and international investors in the long term.
