DUBAI'S GROWING POPULATION

SET TO SUSTAIN PROPERTY MOMENTUM, ANALYSTS SAY

- BY NIVETHA DAYANAND Assistant Business Editor

After five years of rapid expansion, analysts are forecasting a period of price moderation as new supply enters the market.

However, they are optimistic that even though prices may soften over the next 12 to 18 months, a steady increase in the emirate's population will be able to absorb the surplus relatively quickly.

Moody's Ratings expects a modest decline in developer sales and mild price pressure in parts of the market, though fundamentals remain intact and systemic risks appear contained.

The shift follows a record 2025, when Dubai recorded more than 270,000 real estate transactions worth Dh917 billion. Offplan activity dominated the market, accounting for roughly 72 per cent of residential deals, while transaction volumes in the first half of 2025 rose 26 per cent year-on-year, according to Dubai Land Department data.

APARTMENTS MOST EXPOSED, VILLAS MORE RESILIENT

Price movements are unlikely to be uniform across segments.

"In our view, the most likely outcome is a mild softening overall rather than a deep correction. Price developments will differ significantly across market segments. We expect small outright price declines in the apartment segment, particularly affordable studios and one-bedroom units and in more price-sensitive areas where supply is increasing most sharply," said Lisa Jaeger, Vice-President Senior Analyst at Moody's Ratings.

"By contrast, we continue to see price increases in the villa segment, although at a slower pace than in recent years, reflecting more resilient demand dynamics and tighter effective supply."

The divergence reflects shifting buyer preferences towards larger homes and established communities, even as mid-market apartment clusters face heavier delivery schedules.