Will the Dubai real estate market face a stagnation?

Dubai's glamour attracts many investors seeking huge opportunities. Yes, this location is almost a safe bet if you are looking for a lucrative real estate investment. Strong and stable economy, tourism and security. Dubai has it all, but despite the intense marketing

Dubai's glamour attracts many investors seeking huge opportunities. Yes, this location is almost a safe bet if you are looking for a lucrative real estate investment. Strong and stable economy, tourism and security. Dubai has it all, but despite the intense marketing by developers or real estate agents, I wouldn't quite wear rose-coloured glasses that this trend will be significantly pro-growth forever. That's why I wouldn't put off buying an investment apartment for long. It's quite possible that you'll just catch that "golden peak" in the coming years.

Every area experiences a boom and then a stagnation. This is a natural cycle, despite the high concentration of new projects. For example, in January 2025, property prices dropped by 0.57% and the curve went down after almost 3 years when the real estate market in Dubai had a really fast and noticeable growth. 

Most of the transactions here take place in so-called off-plan projects, meaning that the investor books his apartment before it is completed. They don't pay the whole amount right away, but gradually pay it back during the construction. This makes the properties more affordable than in the markets, where properties are mostly sold already finished and therefore at a higher price. The charm of Dubai is just that you are able to make your investment appreciate in value even before you are handed over the keys.

Average gross rental yields are between 6-9% and this is expected to be long term, so from this perspective compared to other world cities Dubai still has the edge. However, it is the growth in property prices itself that remains an issue. This may be influenced by a glut of new projects, which is naturally always a good sign. Construction is taking place where there is demand, but the ratio may not be sustainable. The higher interest rates that we are seeing in various global markets may be contributing to this, therefore limiting the financing options for buyers. This will certainly have an impact on property prices, which may start to stagnate and fall. So an investor in a few years time will not appreciate his investment as much as he would, for example, today.

On the one hand, this development may bring interesting opportunities. Especially for those who have been waiting for prices to fall. On the other hand, it may mean a longer wait for a return on investment and lower capital growth in the short term.

So if I were to make a personal decision on whether to invest in a property in Dubai as soon as possible, I would not be speculating unnecessarily. If you lack financing, we can be the support for many investors here who don't want to miss the chance to seize the best investment moment. We finance both the purchase of off-plan projects and completed properties.  

The takeaway from this article is not that Dubai is losing perspective. On the contrary, it has the most stable perspective at the moment, and that will not change for a long time. However, it should be taken into account that the real estate market has its own specifics and it is necessary to know when it has a strong period and when it has a weak one.