Dubai’s property market, poised to surpass its longest-ever bull run, is showing early signs of strain, according to analysts and data providers. The nearly five-year surge in prices has been driven by sales of off-plan homes as well as finished luxury villas and townhouses. If prices continue rising into October, the city will surpass 57 consecutive monthly increases, data from Reidin shows.
However, rating agencies predict a slowdown next year as thousands of new units are completed each month. Would-be “flippers” — investors who buy unfinished properties to resell quickly at a profit — are already finding it difficult to offload off-plan units, according to brokers and analysts.
Property Monitor warned that the glut of new apartments, which make up 95% of the 93,000 new units entering the market this year, is “beginning to test the depth of demand.” Credit rating agency Moody’s said the expected 150,000 homes to be finished between 2025 and 2027 “is likely to curb a five-year run of sharp price escalations,” forecasting a modest price correction starting in 2026. Fitch has previously projected a potential 15% price decline.
Prices per square foot in Dubai are now 25% higher than the previous 2014 peak, driven partly by investors attracted to lower costs than in Western cities and the emirate’s growing population. Chris Whitehead, managing partner of Dubai Sotheby’s International Realty, noted that “there’s no real estate economy on the planet that continues up, up, up,” though he expects high-end luxury properties to remain resilient.
Flipping activity has already cooled, with Property Monitor reporting that resales of unfinished units fell from about a third of the resale market to 20% by July. Alec Smith, head of residential sales at Savills Dubai, said many speculative investors were “sold a false promise of easy money,” and warned that prices could soften in areas with high concentrations of new developments.
The Financial Times has highlighted Dubai’s property boom in recent months, noting that regulatory reforms and robust international demand have helped the market appear more resilient compared with previous cycles of boom and bust.
