Dubai’s real estate market may be nearing a turning point, with property prices expected to drop by up to 15% as they reach their peak, according to a new industry report.
Supply to Outpace Population Growth
Between 2025 and 2027, property supply is expected to grow by 16%, significantly outpacing the 5% projected population growth. This increase in supply is likely to lead to a correction in property prices, especially after a strong four-year rally fueled by foreign investors, high-net-worth individuals, and professionals moving to the UAE.
Since 2022, residential units in Dubai have increased by around 60%, supported by post-pandemic immigration and a stable economic environment that has attracted global investors.
Record-Breaking New Units on the Way
Dubai is set to see a record handover of new residential units, with about 250,000 units expected between 2024 and 2026:
30,000 units in 2024
90,000 units in 2025
A peak of 120,000 units in 2026
This surge follows a high volume of project launches in 2023 and 2024.
Population Approaches 4 Million
As of May 29, Dubai’s population stood at 3.948 million, up from 3.914 million at the end of March, according to the Dubai Statistics Centre. The population is on track to cross 4 million by the end of 2025.
Changes in Real Estate Financing
Banks in the UAE are becoming more cautious with real estate financing. Many projects are now being sold off-plan and funded through escrow accounts, reducing the need for direct bank lending.
From 2022 to 2024, corporate real estate lending fell by AED66 billion, and the sector’s share in total domestic loans dropped to 14% by the end of 2024. Mortgage loans made up an additional 8%, bringing the total real estate exposure to 22% of all bank loans.
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