UAE Property Prices to Dip from 2026 as 150,000 New Homes Hit the Market
The UAE real estate sector has enjoyed years of record-breaking growth, with strong demand driving prices higher across Dubai, Abu Dhabi, and other emirates. However, a new report from Moody’s Ratings suggests that this momentum may slow as supply catches up with demand. According to the analysis, more than 150,000 new homes are set for delivery between 2025 and 2027, which could trigger a modest correction in property values starting in 2026. For residents and investors alike, this shift signals both challenges and opportunities.
A Wave of New Supply
The 150,000 homes expected over the next three years represent a nearly 20% increase in Dubai’s total housing stock. Developers have been accelerating launches since 2023 to meet strong demand, but the sheer volume of projects means supply will eventually outpace population growth. Moody’s projects that this imbalance could push prices down by up to 15%, particularly in apartment-heavy districts such as Jumeirah Village Circle (JVC), Arjan, and other mid-market communities.
For buyers, this additional supply could translate into better bargaining power. For tenants, it could mean rental stabilization after several years of steep increases. In fact, Moody’s describes the outlook as “stable,” pointing to strong macroeconomic resilience and investor confidence in the UAE’s diversified economy.
Why Demand Remains Strong
Despite the expected correction, demand for UAE property is far from collapsing. Dubai’s population grew by 6% in 2024 to 3.9 million, fueled by economic growth and forward-looking visa reforms such as the Golden Visa. Household sizes are shrinking—from an average of 4.4 people in 2019 to 3.9 in 2024—further increasing the need for additional housing units.
Wealthy newcomers are also shaping the market. Dubai is now home to more than 80,000 millionaires, double the figure from a decade ago. In the first quarter of 2025 alone, nearly 600 properties priced above AED 20 million were sold, reinforcing the emirate’s status as a global luxury hub. High-demand neighborhoods like Downtown Dubai, Dubai Marina, and Palm Jumeirah continue to attract both investors and end-users seeking prime lifestyle communities.
Villas vs Apartments: Different Paths Ahead
Since the pandemic, villas have outperformed apartments, with prices climbing 20% in late 2024 compared to the year before. Apartments, while also rising by 18% during the same period, are more vulnerable to oversupply. Moody’s expects villa demand to stay resilient, though growth will slow as new communities are handed over. In contrast, apartment prices in mid-market zones could see sharper declines as fresh supply floods the market.
For families, this means villas in communities like Dubai Hills Estate and Emirates Hills will remain premium assets, though with less aggressive appreciation than in recent years. For investors, mid-market apartments could offer attractive entry points, particularly for rental-focused strategies.
Developers Are Stronger Than Before
Unlike in past cycles, developers are entering this period from a position of financial strength. Moody’s notes that major builders like Emaar have significantly reduced debt levels, while combined profits for the UAE’s six largest developers reached AED 46 billion in the past year, up from just AED 12 billion five years ago. Emaar’s revenue backlog alone has soared to AED 129 billion in 2025, providing security against potential market slowdowns.
This stronger financial foundation means developers are better positioned to continue projects, even if prices soften. It also reassures buyers that projects are less likely to stall, a key confidence booster for both off-plan and resale investors.
Stronger Rules to Protect Buyers
Regulatory reforms have also reshaped the UAE’s property landscape. Off-plan buyers’ funds must now be held in escrow accounts, released to developers only when construction milestones are achieved. Developers are also required to secure land and approvals before launching sales. These safeguards reduce systemic risks and protect buyers from speculative overexposure.
Sharjah, too, has introduced new escrow laws in 2025, aligning its buyer protections more closely with Dubai and Abu Dhabi. Together, these measures support long-term growth while building trust in the market.
What It Means for Buyers, Renters, and Investors
For buyers, the coming years may provide opportunities to secure better deals as supply expands. Apartments in areas like Business Bay and JVC could become more affordable, especially for first-time homeowners. Renters may finally see stabilization in lease prices, particularly in mid-market apartments, as competition among landlords grows.
Investors should remain cautious but optimistic. Villas and luxury homes in areas like Palm Jumeirah and Dubai Hills Estate will likely continue to perform, while mid-tier apartments may require more selective strategies to ensure healthy ROI.
Conclusion: A Stable Market Ahead
While Moody’s forecasts a modest correction beginning in 2026, the UAE real estate market remains fundamentally strong. Population growth, foreign wealth inflows, and robust developer finances all point toward long-term resilience. Buyers, renters, and investors alike can take confidence in a market that is becoming more balanced—where supply meets demand, prices stabilize, and opportunities remain plentiful across Dubai and Abu Dhabi’s thriving communities.
