Dubai Property Prices:
When Will They Fall and By How Much?
By Omar Abu Innab
A decade of growth: Is Dubai’s real estate market headed for a correction? Dubai’s property market has been on a rollercoaster ride over the past decade. Prices peaked in 2014, stagnated, and then declined for several years before rebounding sharply in 2022. Since then, the market has experienced remarkable growth, fuelled by economic resilience, pro-business policies, and a population boom.
But with such rapid appreciation, one question looms large: Is Dubai in a property bubble, or is this just the beginning of a new era of sustainable growth? Let’s dive into the data to uncover what’s driving the market and what lies ahead.
Historical performance, the previous 10 years:
Dubai’s residential property market has undergone significant transformation over the past decade. After peaking in 2014, prices stagnated and declined for several years before rebounding sharply in 2022. Since then, both apartments and villas have seen their strongest average annual growth in a decade.
Key drivers of this recovery include:
- Economic resilience: Dubai bounced back from the pandemic faster than many global markets after economic shocks.
- Investor confidence: Long-term visas, tax-efficient policies, safety, and infrastructure investments have attracted global investors.
- Population growth: The city added approximately 1.5 million residents over the last decade, reaching 3.8 million in 2024—a staggering average annual growth rate of 6.5%.
In 2024 alone, Dubai welcomed 6,700 new millionaires, further fuelling demand for high-end properties. However, housing supply lagged behind demand, with only 330,000 new units delivered over the decade—creating a persistent supply gap.
This imbalance has driven prices upward:
- Apartments: up 18% compared to 2014.
- Villas: up an impressive 58%, reflecting a growing preference for spacious homes.
Global geopolitical shifts have also funnelled investment into Dubai’s stable, tax-efficient real estate market. As a result, the city has solidified its reputation as one of the world’s most dynamic property markets and a premier destination for long-term wealth preservation.
Looking ahead, the supply of residential properties is for the most part fixed until end of 2027 as new projects being launched in 2025 are targeted to be delivered in 2028 and beyond. On the demand side, assuming no major economic shocks, our analysis considers two scenarios:
- Scenario 1 assumes the current population growth rate of 4.11% annually.
- Scenario 2 considers an accelerated annual growth rate of 6.5% average as seen during 2014–2024.
Dubai’s population grew by 4.11% in 2024—the fastest rate in over four years. Under Dubai’s Urban Master Plan, the city aims to increase the population to 5.8 million by 2040.
Scenario 2: 6.5% growth rate: Driven by innovative initiatives and the global environment, the population is forecasted to reach 4.6 million by 2027. This will naturally fuel higher housing demand requiring 252,000 residential units. With a strong predicted demand, the current apartment supply appears relatively aligned with projected needs, whereas villa supply is expected to fall short, tightening the market for high-end, spacious homes.
The anticipated scarcity of villas suggests continued upward pressure on prices, with a projected cumulative growth of 27% by 2027. Meanwhile, strong demand for apartments—particularly in prime locations—may maintain competitive market conditions and support price appreciation in select developments. However, apartment prices overall are expected to remain relatively stable, with a modest cumulative growth of 5% by 2027.
Conclusion
Dubai’s real estate market has transformed from a speculative hotspot into a more mature and resilient investment destination. While concerns about oversupply persist in certain segments, strong population growth and robust demand fundamentals suggest that any corrections will likely be short-lived.
Apartment prices may see brief corrections in the coming years, while a persistent supply gap will keep upward pressure on villa prices over the next three years. Villas continue to remain one of the highest-performing asset classes. For investors seeking long-term wealth preservation or end-users looking for quality homes, Dubai continues to offer compelling opportunities.
Concerns about oversupply often stem from sentiment rather than actual market conditions. Dubai will either maintain a delicate supply-demand balance or face continued shortages, particularly in the villa segment. While apartment prices may see a brief correction in 2026, broader market stability is expected to remain intact, reinforcing Dubai’s long-term investment appeal.
Prime areas such as Downtown Dubai and Palm Jumeirah are likely to remain more resilient during downturns and lead price growth during upswings, largely due to limited space for new development, constrained future supply and sustained demand. In contrast, areas like Dubai Land and Dubai South offer greater availability of land, making them more susceptible to oversupply. As a result, these areas may experience sharper price corrections during downturns and more modest appreciation during growth cycles. Dubai’s property market has evolved from a transient, tourism-driven destination into a matured, thriving metropolis with a steadily growing population from all over the globe. As the city continues to actively attract residents seeking economic opportunities and a safe high-quality lifestyle, its real estate market remains anchored by strong fundamental demand.
