Opinion: Dubai Property Prices Will Continue to Rise in 2025

The recent Fitch Ratings report projecting a potential decline in Dubai's property prices by 2026 due to a surge in supply has sparked a wave of debate across the real estate landscape.

“The market could face oversupply from 2026,” warning that this may lead to “downward pressure on residential property prices.” according to the Fitch Report.

While such assessments deserve attention, they must be balanced with deeper contextual analysis—especially one that factors in market segments beyond off-plan developments, considers population and economic growth projections, and acknowledges Dubai’s evolving role as a global business hub. However, there are strong believers and economic drivers that Dubai’s property prices are poised not to decline, but rather to continue on a growth trajectory—albeit a more measured and sustainable one—driven largely by rising demand for ready and second-hand properties, demographic expansion, and targeted government policies.

Ready Property and Second-Hand Market Surge

To understand the direction of Dubai’s real estate market, it is essential to look beyond aggregate supply numbers and delve into buyer behavior. The majority of buyers and investors, particularly end-users and families relocating to Dubai, are increasingly opting for ready properties. With many off-plan units still years away from delivery, there is a distinct market for turnkey homes that offer immediate occupancy.

This growing appetite for move-in-ready units has energized the secondary market. As demand surges in this segment, it’s driving price resilience—and in many cases, appreciation. In some prime areas, secondary prices have already reached, or even exceeded, pre-pandemic levels. With rental yields remaining high, many investors are choosing to hold on to their units, tightening available supply in the resale market even further.

Indeed, while Fitch forecasts that “a substantial proportion of upcoming supply is concentrated in the affordable-to-mid-income segments,” the most desirable neighborhoods—from Dubai Marina to Downtown Dubai, Palm Jumeirah to Jumeirah Village Circle—are experiencing increased activity and limited inventory of ready units. These are not segments where prices are poised to drop. On the contrary, market forces are driving steady gains.

Population Growth as a Structural Driver

One of the critical forces underpinning Dubai’s property demand is the city’s expanding population. Dubai’s 2040 Urban Master Plan envisions the population growing to 5.8 million by 2040, a dramatic rise from the current 3.6 million. More than just a vision, this trajectory is supported by both internal and external dynamics.

As Fitch notes, “demand has remained strong due to robust population growth and economic diversification.” This is a key point—and arguably the most important factor to counter the oversupply thesis. No matter how many units are delivered in 2026, if Dubai’s population keeps rising at its current rate, the new supply will be met with proportionate demand.

Employment and Business Incentives Fueling Demand

The Dubai government has made no secret of its intent to become a magnet for global talent and investment. From the Golden Visa program to full foreign business ownership and tax-friendly reforms, the emirate is increasingly attractive to both companies and individuals looking for a stable, globally connected base.

These incentives are having a clear economic impact. Multinational firms are relocating regional headquarters to Dubai, startups are setting up shop, and new jobs are being created across sectors—especially in tech, finance, and tourism. This influx of talent leads directly to housing demand. More executives are choosing to live in Dubai long term, and more professionals are entering the rental and ownership market.

As a result, new supply may not saturate the market—it may be exactly what is needed to accommodate this economic momentum. In fact, many of the units currently under construction are already sold off-plan, meaning the actual number of unsold homes entering the market may be less than feared.

Long-Term Confidence and Global Appeal

Dubai’s property market also benefits from a growing class of global investors seeking diversification and yield. With competitive pricing compared to other global cities like London, New York, or Singapore, and with gross rental yields ranging between 6%–8% in many districts, Dubai remains an attractive destination for real estate capital.

As Fitch highlights, “affordability remains reasonable despite rapid price appreciation over the last two years.” This is a key differentiator for Dubai compared to overheated Western markets. Even in a high-interest environment, Dubai’s relatively accessible pricing keeps it attractive to both first-time buyers and institutional investors.

Moreover, Dubai’s infrastructure, lifestyle offerings, and safety continue to make it a standout choice for remote workers, digital nomads, and affluent individuals seeking second residences. This class of buyers is less impacted by local mortgage rates and more interested in location, amenities, and long-term value appreciation—factors that will continue to support price growth in prime segments.

A Market of Segments, Not a Monolith

One of the most important considerations often overlooked in broad market forecasts is the segmentation of Dubai’s real estate ecosystem. The term “oversupply” does not affect all segments equally. Luxury waterfront villas in Palm Jumeirah or branded residences in Downtown Dubai cater to a different audience than entry-level apartments in peripheral zones.

As such, we must assess price projections through a segmented lens. Even if some areas see a temporary flattening due to new supply, other segments—particularly those with limited land, high prestige, or strong lifestyle appeal—will likely experience continued price increases. Market resilience is not about uniformity, but about balance.

While the Fitch Ratings report presents a cautionary tale, the fundamentals of Dubai’s property market tell a story of resilience and long-term growth. Yes, supply is increasing, but so is demand. Yes, affordability is a concern—but so are quality, convenience, and lifestyle, all of which Dubai delivers at world-class levels.

The rise of the second-hand market, coupled with a growing population, favorable business environment, and increasing global appeal, creates a compelling case for sustained price growth, particularly in well-located, high-demand areas.