DUBAI: The buzz that surrounded the three-day Cityscape Global property exhibition in Dubai this week belied a market still suffering from expat job losses and investor uncertainty.
While property investors hope for an Expo 2020-related rebound, prices remain weak.
Still, the prospect of a further weakening of the dollar may provide a silver lining to the clouds that hang over the market.
The US dollar, to which the UAE dirham is pegged, has lost about 7 percent against the euro in the last three months, while it is about 4 percent down on the pound over the same period.
“Though slow economic growth in the region and continued new supply may keep a lid on capital price appreciation, new activity arising from events such as Expo 2020 may provide a floor for price depression,” said Anita Yadav, Head of Fixed Income Research at Emirates NBD. “The slowing economy has led to lower job creation and lower immigration of expats into the region,” she added.
Similarly, the relatively strong US dollar, while losing some ground in recent months, has made property purchases expensive for many overseas buyers.
Dubai residential property prices and rents are set to fall further this year as losses of high-paying jobs and dwindling household incomes boost vacancy rates, according to Phidar Advisory, a real estate consultancy, in a report published in April.
“Sales volumes of completed properties are at a six-year low and vacancies are rising across the city,” the report said.
Prices of single-family homes, known locally as villas, slid 10.2 percent on average over the past 12 months, while apartment values remained unchanged. Villa rents dropped 4.9 percent while apartment leases fell 3.4 percent in the period.
Still, positive signs are emerging on the buyers’ side of the market from the UK, India and Pakistan as their currencies gain ground against the dollar.
Analysts said this may explain a slight improvement in apartment sales volumes.
Dubai resident Faraz Waqar feels the time is not yet right to buy a home. He had even thought about selling a property he owns in Pakistan so that he could buy in Dubai — but the experience of his friends changed his mind.
“Some of them invested and have lost around 30 percent on the value of their property so far in the last couple of years. So I am happy with the current scenario — that I stayed away from property investments in Dubai,” said the marketing professional.
Salman Hameed, who has in the past invested in Dubai, is now having second thoughts. “It’s all a matter of supply and demand. Too much supply reduces the investment appeal,” he said.
But beyond this basic economic equation, the emirate still offers many positives to investors that are hard to find elsewhere in a volatile region.
“This attracts end users who want to make Dubai their home and want to save on rent. But for the speculators, I don’t think Dubai offers a good opportunity anymore. They are better off investing in their own countries,” said the Pakistani medical practitioner who has been living in the city for over a decade.
The models of outlandish projects which have become a hallmark of the show over the years were in plentiful supply, such as a floating home with a basement from which to observe passing marine life. However, despite such attractions, the sales agents appeared almost to outnumber the visitors around some stands.
This did not prevent some of those visitors sounding upbeat about the property market before the exhibition ended on Wednesday.
Fahd Dawood, a real estate consultant based in Dubai, believes that investors continue to have faith in Dubai’s market.
“I was not expecting that this year’s Cityscape Global was going to be that busy, with genuine buyers around,” said Dawood, noting that direct property sales had returned to the halls of the exhibition after being prohibited for a number of years following a return of rampant speculation.
Data from the Dubai Land Department (DLD) revealed the list of nationalities that formed the bulk of buyers in the period between January 2016 and June 2017.
Emiratis made close to 12,000 investment transactions worth 37.4 billion dirhams ($10.2 billion), while Indian, Pakistani, Saudi Arabian and British investors ranked second, third, fourth and fifth respectively.
Saudis led the Gulf nations with 5,366 transactions worth 12.5 billion dirhams and UK citizens took top spot among the European nationalities with 4,188 transactions worth 9 billion dirhams.
Dubai property investors look to Expo 2020 as job losses detract from Cityscape buzz
Dubai property investors look to Expo 2020 as job losses detract from Cityscape buzz
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UAE’s residential real estate market to see softer home sales
- Moody’s sees mild softening of prices over the next 12 - 8 months as rising completions add supply
RIYADH: The UAE’s residential real estate market is expected to see a modest decline in developer sales and a mild softening of prices over the next 12 to 18 months as rising completions add supply, Moody’s said.
Despite near-term easing, the credit ratings agency noted that developers are supported by strong revenue backlogs and solid financial positions, while regulatory measures have reduced banks’ exposure to the construction and property sectors, helping to preserve robust solvency and liquidity buffers across the financial system.
The broader trend is reflected in the UAE’s real estate market, which recorded a strong performance during the first three quarters of 2025, according to Markaz.
In Dubai, transaction values increased 28.3 percent year on year to 554.1 billion Emirati dirhams ($150.88 billion), while Abu Dhabi recorded total sales of 58 billion dirhams, up 75.8 percent year on year. The number of transactions in Abu Dhabi rose 42.3 percent to 15,800.
The report said: “After five years of extraordinary growth in the UAE’s residential real estate market, particularly in Dubai, we expect developer sales to decline modestly and some price softening over the next 12 to 18 months as rising completions add supply.
“From 2026 to 2028, around 180,000 new units will be completed in Dubai, a significant increase from prior years that is likely to weigh on demand and slow price growth.
“However, fundamentals remain supportive, underpinned by continued population growth and an influx of high-net-worth individuals. Rated developers’ credit quality will remain resilient, supported by strong revenue backlogs, front-loaded payment plans and solid financial positions.”
Munir Al-Daraawi, founder and CEO of Dubai-based Orla Properties, told Arab News the Moody’s report underscores what the firm is seeing on the ground, namely “a market that is successfully transitioning from a period of extraordinary growth to one of sustainable stability.”
He added: “While a mild softening of prices and a modest decline in sales are anticipated over the next 12 to 18 months, these are natural adjustments for a maturing global hub like Dubai.”
Al-Daraawi believes the the projected delivery of 180,000 units between 2026 and 2028 is not a cause for concern, but “a reflection of the UAE’s long-term appeal to high-net-worth individuals and a growing population.”
The CEO added: “The report rightly points out that fundamentals remain supportive, underpinned by Dubai’s 2040 Urban Master Plan and a significant influx of global talent.”
He went on to note that the resilience of the sector is further bolstered by the solid financial positions of developers and the strong regulatory measures that have shielded the banking sector from excessive exposure.
“This creates a robust ecosystem where credit quality remains high, even as we navigate a more competitive landscape. For boutique and luxury-focused developers, the current environment emphasizes the importance of quality, execution, and strategic capital allocation — factors that will continue to define the UAE’s real estate success story,” said Al-Daraawi.
The current environment emphasizes the importance of quality, execution, and strategic capital allocation.
Munir Al-Daraawi, Founder and CEO of Orla Properties
Riad Gohar, co-founder and CEO of BlackOak Real Estate, told Arab News that while Moody’s is correct to say that supply is rising, the conclusion of a broad slowdown ignores the structure of this current economic cycle.
He added: “First, this is not a debt-fueled market. Around 83 percent of Dubai residential transactions in 2024 and 2025 were non-mortgaged. That means the market is equity-driven, not credit-driven. When cycles are not built on leverage, corrections are typically shallow and segmented, not systemic. “
He added that the macroeconomic backdrop is stronger than in past cycles, driven by sustained non-oil gross domestic product increase, structural reforms, population growth, and capital inflows aligned with long-term national plans.
“Demand is not purely speculative; it is driven by migration, business formation, and wealth relocation,” the CEO said.
“Third, prime vs. non-prime must be separated. Any pressure from increased completions is more likely to affect marginal locations, not established prime areas supported by global HNWI inflows. Historically, prime assets in Dubai have shown resilience even during broader market pauses,” Gohar added.
He continued to clarify that for smaller developers, some may feel margin compression if sales moderate, but this becomes a consolidation phase, not a systemic risk.
“Banks’ real estate exposure has already declined to around 12 percent of total loans — from 19 percent in 2021 — and NPLs (non-performing loans) are low at 2.9 percent, meaning financial contagion risk is limited. Regulatory escrow structures and stricter oversight further reduce spillover,” the CEO said.
“We are in a capital-rich, cash-driven cycle, regulated market with strong GDP and population growth. If anything, weaker fringe players exiting would strengthen the core not destabilize it,” he said.
The Moody’s report highlighted that while most developers it rates will generate “substantial excess cash” over the next two to three years, there will be fewer opportunities to make significant investments, especially within the Dubai real estate market.
As well as prompting a shift toward corporate governance and, in particular, how developers deploy their rising liquidity, some firms are looking to diversify beyond their core business models.
“For instance, Binghatti has recently launched its first master-planned villa community, marking a departure from its historical focus on single-plot high-rise developments, as demand for villas continues to outperform that for apartments,” said the report.
It continued: “Others are looking beyond Dubai and the UAE for growth, whether through geographic diversification or expansion into unrelated sectors.
“For example, Damac’s owner, Hussain Sajwani, has announced significant planned investments in data center development across the US and Europe.
“Emaar continues to develop actively in Egypt and India and is evaluating potential entry into China and the US. Aldar has started development projects in the UK and Egypt, while Arada has begun building in Australia and the UK and Sobha is expanding into the US.”
