Dubai’s property market is projected to stabilise or experience a slight decline over the next 12 to 18 months, according to a recent Moody’s Ratings report. The agency highlights potential challenges for developers, including rising construction costs and delays due to outsourced building works, with a substantial backlog of pre-sold properties slated for completion in the next two to three years.
In a rating report for Alpha Star Holding IX Limited, a special-purpose vehicle of Damac Real Estate Development, Moody’s assigned a Ba2-backed senior unsecured rating to the proposed sukuk trust certificates.
In October 2024, S&P Global projected a potential decrease in property prices for 2025-2026, attributing this to an anticipated influx of approximately 182,000 residential units as pre-sold properties from 2022-2023 reach completion. However, S&P noted that significant construction delays could tighten the market, supporting short-term price increases.
According to Zawya, preliminary estimates from real estate consultancy ValuStrat in January 2025 indicated that only 58% of the projected residential supply in Dubai was delivered in 2024, equating to about 27,000 completed homes—the lowest number in six years.
Despite these challenges, Knight Frank anticipates an 8% rise in Dubai property prices in 2025, driven by a shortage in supply. The firm notes that nearly 18% of homes in the city are now valued at over $1 million, reflecting sustained demand in the high-end market.
Additionally, Cushman & Wakefield reported that only 30,200 residential units were handed over in 2024, 11% below forecasts and 30% lower than in 2023. This shortfall has contributed to a 16% year-on-year increase in citywide residential rents and an 18% rise in sales prices.
