Property prices and rents in Dubai are forecasted to remain stable over the next 18 months and could possibly fall in the following 18 months due to supply pressures, reported Khaleej Times.
Sapna Jagtiani, a primary credit analyst at S&P Global, noted that the market is expected to experience roughly about 182,000 new residential units delivered between 2025 and 2026. This increase is coupled with even higher presales in 2022-2023 buildings, which is relatively higher than the annual delivery from 2019 to 2023, averaging over 40,000 units.
The recent trend analysis of the Dubai real estate market reveals that property prices have been gradually increasing to unprecedented demand in the post-pandemic period. Jagtiani however noted that the absorption rate of new inventory will partly depend on the annual growth of Dubai’s population which is forecasted to grow to about 35 percent in the same period.
This demographic growth together with continuing investor demand will play a crucial role in determining how quickly the new supply can be absorbed.
“So far though, deliveries in 2024 have not kept pace with those in 2023. Significant delays in delivery, which are not uncommon for the industry – often due to construction capacity constraints – could tighten the market and support upward price trends, at least over the short term. Yet we expect the residential real estate market to balance out by 2026 at the latest,” said Jagtiani as quoted by Khaleej Times.
It is noteworthy that while there are some concerns about oversupply potentially saturating demand and leading to lower prices and rents, the overall sentiment remains optimistic. The property market has shown fairly stable and sustainable growth in Dubai due to factors including a diversified economy, strategic planning and recent government policies on housing, not forgetting the ever-growing number of expatriates in the region.
As this market real estate evolves, it is to the benefit of the stakeholders that they keep abreast with changes in the market that may affect investment policies within this lively market arena.
