Will Dubai’s super-hot property market avoid a crash?

Despite fears of a reckoning, its fundamentals look solid

- The Economist

Despite the price rises, property in Dubai remains relatively affordable.

(AFP)

It is difficult, in Dubai, to avoid the enthusiasm for property. Not a day goes by without the announcement of a new development. Home advertisements are plastered across billboards. The ever-expanding urban sprawl and skyline betray the heady activity. So does the traffic. New arrivals raise prices, and clog the roads.

According to Deutsche Bank, the price per square metre of a flat in the heart of the city has risen by 122% in dollar terms over the past five years—second only to Riyadh in the 69 urban areas tracked by the bank. Residential prices are a fifth higher than their previous peak, which was reached in 2014. In the year to August total property sales came to 4-41bn dirhams ($120bn), a third higher than in the same period in 2024. Is this all too good to be true?

The record-setting numbers have prompted warnings of imminent price corrections and fears of oversupply. Yet such worries look overblown: demand is sticky and builders have become more disciplined. The emirate’s property market has at last grown up.