Skip to content Skip to Search
Skip navigation

Dubai real estate ‘hot’ but no bubble fears, say experts

Dubai real estate bubble Reuters/Mosab Omar
A model display at Dubai's Cityscape Global property exhibition. Around 40,000 new units are expected to be added to Dubai this year
  • No ‘bubble’ for Dubai real estate
  • Prices up 20% last year
  • Near previous peak levels

Dubai’s real estate market is running “a bit hot”, but it is not heading towards a bubble or another catastrophic crash, experts say.

Residential sales prices in the emirate increased 20 percent in 2023, while city-wide rents grew 9 percent higher, according to the latest research from Cushman & Wakefield Core.

Although Dubai remains more affordable per square metre than global contemporaries such as Hong Kong, Singapore, Zurich and Tokyo, as per the Global Property Guide, fears persist over the potential for a real estate correction similar to the one experienced in 2008.

Maurice Gravier, chief investment officer at Dubai-based Emirates NBD, admitted the market was “probably a bit hot” in the short-term, but added: “The medium-to-long-term prospects are great because the population is rising.”

Since navigating its way safely out of the Covid pandemic in the summer of 2020, Dubai has operated an open-door policy to attract investment in the emirate.

The government has made its visa policy more flexible as part of economic reforms to diversify away from oil, offering longer residencies for certain categories of investors, students and professionals.

The emirate plans to increase its population to 5.8 million by the end of the next decade as part of the Dubai 2040 urban masterplan.

Dubai’s real estate market contributes around 9 percent towards the emirate’s GDP.

The total number of $10-million-plus home sales in Dubai grew by 92.4 percent to 431 sales during 2023, according to analysis from property consultancy Knight Frank.

The total value of sales above this price point grew by 91 percent last year to $7.6 billion, 28 percent of which was achieved in Q4 alone.

Tatjana Lescova, associate director and primary credit analyst at S&P Global Ratings, voiced concerns in November about the increasing risks of a cyclical slowdown and a potential mild price reversal.

She pointed out that property prices were nearing their previous peak levels, which could dampen buyer interest and push down demand.

Around 40,000 new units are expected to be added to the Dubai market this year.

Julien Lafargue, director and chief market strategist at Barclays Private Bank, said: “There is nothing that tells us at this stage or that signals that something as bad as what happened in 2008 is on the cards.”

He added not to expect a replication of any previous crisis.

“Each crisis is going to be different from the previous one,” he said. “So if the previous crisis was a financial one linked to real estate, we can imagine that the next one is probably not going to be a replica of that and if it does strike it will be in another sector.”

House prices in Dubai’s Palm Jumeirah, Emirates Hills and Jumeirah Bay Island are forecast to increase by 5 percent this year after recording growth of 15.9 percent in 2023 through to September, according to Knight Frank.

Anita Gupta, head of equity strategy at Emirates NBD, said that while the 2008 crash was driven by too much leverage in the market, “this year the leverage is more controlled”.

“At the moment, the demand and supply looks to be in balance. So we expect at this point that prices would also stay stable,” she said.

Latest articles

UAE France

Climate transition galvanises ties between UAE and France

Climate transition is becoming a central focus of economic cooperation between the UAE and France as the countries agreed to establish a “Bilateral Climate Investment Platform”. The platform aims to accelerate joint projects and investments in clean energy sectors, with a particular focus on advancing the decarbonisation of industries such as steel, cement and petrochemicals. […]

Baghdad South power plant: Iraq generates 80% of its power using fossil fuels

Iraq plans push on solar and green hydrogen projects

Iraq is planning to build solar plants and its first green hydrogen project as part of a strategy to tackle power shortages and reduce its carbon footprint. The country’s cabinet has approved a proposal to install 12 gigawatts (GW) of solar power by 2030, said a National Investment Commission representative, Rahim Al Jaafari. Projects capable […]

Neom wellness Elanan

Neom announces ‘ultra-modern’ wellness resort

Saudi Arabia’s mega-city Neom has announced plans for another wellness resort on the Gulf of Aqaba.  The new site, Elanan, will be a wellness resort with architecture that uses “ultra-modern design techniques to form intricate sculptures that merge with the surrounding natural beauty,” Neom said on its website. The website shows images of a futuristic-looking […]

Muslim pilgrims pray on the Mount of Mercy outside the holy city of Mecca during the annual hajj pilgrimage in 2023

Saudi visas on arrival for European and US pilgrims

Saudi Arabia is offering visa on arrival for pilgrims who are resident in the EU, US and UK, or who possess a valid visa for those countries. The decision is part of efforts to boost religious tourism to the country.   The Saudi ministry of Hajj and Umrah revealed the new regulations for the Umrah pilgrimage […]