Dubai’s real estate market, which has enjoyed a strong post-pandemic boom, is now expected to face a significant downturn, according to a report released Thursday by Fitch Ratings.
The agency forecasts that property prices in the emirate could decline by double-digit percentages in the second half of 2025 and throughout 2026.
Fitch attributes the anticipated slump to a dramatic increase in housing supply. Developers are on track to deliver approximately 210,000 new residential units across 2025 and 2026 — double the number of units completed over the past three years combined. This unprecedented surge in completions is expected to saturate the market, putting downward pressure on prices.
While the exact magnitude of the decline may vary by segment and location, Fitch estimates that property values could fall by up to 15% during this period.
The agency noted that such a correction, though steep, would reflect a natural adjustment after several years of aggressive price growth driven by foreign investment, residency reforms, and economic recovery post-COVID-19.
This projected cooling of the market marks a stark shift from the buoyant conditions seen in recent years, when Dubai became a magnet for global investors and high-net-worth individuals seeking luxury properties and tax-free benefits.
Fitch’s analysis suggests that unless demand keeps pace with the rapid expansion in supply, developers and investors may face mounting challenges in maintaining profitability and occupancy rates.
Market observers are now closely watching how developers, buyers, and regulators will respond to this forecasted shift in dynamics, which could influence financing conditions, construction schedules, and broader investor sentiment across the UAE’s property sector.
