Dubai Real Estate Prices Set for Correction Amid Supply Surge
Dubai real estate sector, one of the key pillars of the emirate’s economy, may soon face a significant shift. According to a recent report by Fitch Ratings, property prices in Dubai are expected to fall by up to 15% in the second half of 2025 and into 2026. The forecast follows years of exceptional growth after the COVID-19 pandemic.
Fitch highlighted that nearly 210,000 new residential units are expected to be delivered by 2026 — double the volume compared to the previous three years. This spike in supply could outpace demand and lead to a moderate correction in the market.
Between 2022 and early 2025, residential property prices in Dubai surged by around 60%, fueled by massive infrastructure investment, tax-friendly regulations, and relaxed residency laws. The influx of foreign buyers — including Russians during the Ukraine conflict — added to the boom.
Despite the projected correction, real estate remains vital to Dubai’s economy. In 2024, the emirate recorded transactions worth AED 761 billion (approximately USD 207 billion), a 36% increase in volume, according to official government data.
This is not the first time Dubai has faced such volatility. The 2009 property market crash led to a USD 20 billion bailout backed by Abu Dhabi. Since then, Dubai has worked to deleverage, consolidate major developers, and implement long-term economic strategies like the D33 agenda.
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Today, banks and homebuilders are better positioned to absorb price shocks. Fitch noted that UAE banks’ exposure to real estate has dropped to 14% of gross loans at the end of last year, down from 20% just three years prior.
The resilience of demand for Palm Jumeirah properties and delays in key project completions could act as buffers, helping maintain stability in prime areas.
Developers like Samana and Six Senses Residences continue to attract high-net-worth investors, reinforcing confidence in the long-term potential of Dubai’s premium property market.
As supply expands, investors should monitor opportunities carefully. Upcoming projects in communities such as Terra Heights, Marina Cove, and Valo offer strategic entry points for diversified portfolios.
