New supply to balance Dubai realty after four years of soaring costs

Dubai’s property market, which has been on a remarkable rally for four years, is approaching a decisive turning point with predicted market re-balancing in the offing.

- Issac John

Global’ ratings agencies Moody’s and Fitch both expect a market adjustment in the next two years as an unprecedented wave of housing supply in Dubai meets a slowing pace of demand growth. Their cues come after residential values surged nearly 60 per cent between 2022 and early 2025, fuelled by foreign capital inflows, rising affluence, and record immigration supported by long-term visa reforms.

Moody’s forecasts more than 150,000 new homes will be delivered between 2025 and 2027, equal to about 20 per cent of Dubai’s existing housing stock. Fitch’s analysts estimate an even sharper influx, with nearly 250,000 units scheduled for release over the same period, and as many as 120,000 set to hand over in 2026 alone. This represents a 16 per cent increase in supply against the expected population growth of only 5 per cent. Both agencies say this imbalance will inevitably cool the market. However, they stress the adjustment is likely to be orderly, not disruptive, with Fitch capping its projection of price declines at around 15 per cent.