Will Dubai Real Estate Crash in 2025–26?
Here is a clear, source‑backed view of prices, rents, supply, demand, and strategy. With this, you can move forward with more confidence.
Executive Summary
In brief, the most likely path for Dubai’s housing market in 2025–26 is a soft landing. In other words, growth should slow to a steady pace rather than drop. This view rests on simple facts: broad demand from end users and investors, strong population inflows, healthy tourism, and firm office and warehouse take‑up. At the same time, supply is rising; however, it is being delivered in phases that the market can absorb.
These headline figures are from CBRE’s UAE Real Estate Market Review and Outlook, Q2‑2025.
Key Market Moments
Overall, Dubai’s transaction engine remains strong. In fact, off‑plan continues to lead both volume and value. Consequently, momentum from 2024 has carried into 2025.
~43,000 residential transactions reached a total value of AED 114.7B, while off‑plan made up about 69% of activity. Thus, demand stayed broad at the start of the year. (Knight Frank, Q1‑2025)
Next, Q2‑2025 recorded 51,000+ transactions, which was up 23% year on year. Off‑plan sales grew 25% YoY and ready sales grew 16% YoY; moreover, quarter‑on‑quarter volumes rose by 18% overall. (CBRE, Q2‑2025)
Across H1‑2025, sales value reached AED 270B, with AED 192B from off‑plan (share 71%) and AED 77B from ready homes (share 29%). As a result, off‑plan remained the main driver of value. (CBRE, Q2‑2025)
Prices and Rents
After the large gains of 2023, growth has eased. Even so, price trends remain positive across most segments, and villas still lead. On the leasing side, rent growth has cooled; however, it is still positive, helped by clear policy and better visibility for both tenants and landlords.
Metrics per CBRE, year on year to June 2025.
Supply and Pipeline
- 2025 deliveries: about 44,000 units. 2026: about 68,000 units, with more homes in JVC, MBR City, Dubailand, Arjan, and Business Bay.
- Through 2029: a total pipeline of about 300,000 units, delivered in phases.
In short, supply is rising. Even so, it is spread across many areas and several years. Therefore, the risk of a sudden mismatch looks lower as long as demand stays broad.
Figures from CBRE, Q2‑2025 outlook.
Commercial and Logistics Snapshot
Grade‑A and CBD offices remain tight, and new supply is limited. Thus, rates keep moving higher, which supports Dubai’s role as a regional hub. Likewise, logistics keeps expanding on the back of e‑commerce, 3PLs, and re‑shoring. As a result, rents rose by double digits across key clusters.
CBRE, Q2‑2025.
Tourism and Capital Inflows
- Visitors: 8.68M international overnight visitors in Jan–May 2025 (+7% YoY). H1‑2025 reached 9.88M visitors. In addition, hotel KPIs stayed firm (YTD May occupancy about 82.9%, ADR +5%, RevPAR +7%).
- HNWI migration: The UAE is on track for a net inflow of about 9,800 millionaires in 2025. Therefore, prime and branded homes should see steady interest.
Together, these flows support both end‑user demand and investor appetite, especially in core waterfront and amenity‑rich areas.
Policy Watch: Smart Rental Index (2025)
In 2025, Dubai Land Department launched the AI‑enabled Smart Rental Index. The system raises transparency because it uses building class and live contract data in rent guides. Meanwhile, the 90‑day notice rule for rent increases still applies. As a result, both tenants and landlords have clearer signals and fewer disputes.
Investor Playbook (2025–26)
1) Off‑Plan versus Ready
So far in 2025, off‑plan leads by value (71%). Even so, the best choice depends on your goal. Off‑plan can spread cash outlay and, at times, capture early gains. By contrast, ready homes can deliver rent now and carry less handover risk.
2) Micro‑Markets Matter
Look for amenity‑rich nodes such as MBR City, Dubai Hills, and Business Bay. Also, track supply belts like JVC, Arjan, and Dubailand, as well as core waterfronts like Dubai Marina, Palm Jumeirah, and Creek Harbour. In practice, entry price, future supply, and end‑user depth shape outcomes.
3) Payments, Capital Efficiency, and Exit Windows
In simple terms, timing matters as much as price. Down‑payment size, post‑handover terms, and build schedule all move your IRR. Therefore, plan exit windows around major handovers and rate cycles.
Risks and Scenarios (Base, Bull, Bear)
- Base case (most likely): soft landing; prices grow at low‑to‑mid single digits; rents stay positive yet slower; absorption remains healthy as staged supply meets broad demand.
- Bull case: stronger HNWI inflows, record tourism, and limited prime supply lead to better results in luxury and select townhouses or villas.
- Bear case (lower probability): external shocks—rates or geopolitics—or a poorly timed launch wave cause brief pauses in a few sub‑markets; nevertheless, higher‑quality assets hold up better.
These are forward‑looking views. Use them to set guardrails and risk limits, not as guarantees.
Frequently Asked Questions
A broad crash looks unlikely. Because demand is wide and policy is clear, a soft landing is the more likely path.
Rent growth has slowed compared with 2023. Even so, it is still positive. The Smart Rental Index and the 90‑day rule add stability.
It depends on your aim. Off‑plan can reduce near‑term cash strain and, at times, capture early growth. Ready homes can pay rent now and cut handover risk. In the end, location, developer, and payment terms decide.
Townhouses and villas with strong end‑user depth, prime or branded homes backed by HNWI inflows, and mid‑market hubs with good community facilities.
References
- CBRE. UAE Real Estate Market Review & Outlook | Q2 2025. Headline figures: H1‑2025 value AED 270B; Q2‑2025 value AED 154B; off‑plan share 71%; price and rent growth to June 2025; office and industrial metrics; supply outlook.
- Knight Frank. Dubai Residential Market Update | Q1 2025. About 43K transactions; value AED 114.7B; off‑plan share ~69%.
- Dubai Department of Economy and Tourism (DET). Tourism Performance Report Jan–May 2025; Dubai Media Office H1‑2025 visitation.
- Dubai Land Department (DLD). Smart Rental Index 2025 launch notes; 90‑day notice rule guidance.
Tell us your budget, your target yield, and your handover window. Then, we will map options by developer, micro‑market, and payment plan terms.
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