What Residents Can Expect
According to a report by Moody’s Ratings, property prices in the UAE could begin easing in 2026 as tens of thousands of new villas and apartments become available. Over 150,000 new homes are expected between 2025 and 2027, which represents about a 20% increase in Dubai’s housing stock. Moody’s forecasts a modest price correction from 2026.
For buyers, this could translate into more bargaining power; for renters, some relief after years of steep increases in rent; and overall, a less overheated housing market.
Why Demand Remains High
The anticipated dip in prices won’t stem from weakening demand. Dubai’s population rose 6% in 2024 to 3.9 million, buoyed by economic growth and new visa policies. Household sizes have shrunk too — averaging 3.9 people per household now, down from 4.4 in 2019 — pushing up demand for more housing units.
Meanwhile, the influx of wealthy newcomers is reshaping the market. Dubai is now home to over 80,000 millionaires, double the number a decade ago. In Q1 2025 alone, more than 590 homes priced over Dh20 million were sold — the highest such figure in two years.
Together, population growth and high-net-worth arrivals suggest demand is unlikely to collapse. Moody’s describes the outlook as “stable over the next 12 to 18 months,” supported by strong fundamental demand and macroeconomic resilience.
Apartments vs Villas
The type of property matters. Villas have been the standout since the pandemic, with prices rising about 20% in late 2024 compared to the year before. Apartments gained roughly 18% over the same period.
Moody’s expects villa demand to remain strong in the near term, though growth may slow as more villa communities are delivered. Apartments, especially in mid-market areas, may see sharper price declines once supply overtakes demand.
For buyers, this could mean better deals on flats. Families still wanting villas should expect prices to stay high, but with less aggressive increases than in the past.
Developers Stronger Than Before
Residents may feel more confident now because developers are in much better financial shape than in earlier years:
- Emaar’s revenue backlog jumped from Dh25 billion in 2020 to Dh129 billion in 2025.
- Major builders have reduced their leverage, with average debt ratios dropping from 4.8x in 2020 to 1.4x in 2025.
- Combined profits among the six largest developers reached Dh46 billion over the past year, up from Dh12 billion five years earlier.
Moody’s says these improvements mean projects are more likely to be completed even if prices soften.
Rules That Protect Buyers
Regulatory changes over the past decade have improved protections for property buyers:
- Money paid by off-plan buyers must now go into escrow accounts and is released only when construction milestones are met.
- Developers must secure land and approvals before launching sales.
- Sharjah is introducing a new escrow law to align buyer protections more closely with those already established in Dubai and Abu Dhabi.
These reforms help safeguard buyer interests and contribute to long-term market stability by reducing systemic risks.
What It Means for You
- If you’re planning to buy: expect greater choice and potentially softer prices from 2026.
- If you rent: additional supply may ease rental pressure, particularly in apartment sectors.
- If you invest: villas and luxury homes remain attractive, but competition is increasing rapidly.
In conclusion, despite the rising supply, Moody’s believes the UAE housing market “will remain stable,” offering residents more certainty—whether you are a renter, buyer, or long-term investor.
