Market News

Dubai: Home prices in the UAE could begin easing in 2026 as tens of thousands of new apartments and villas hit the market, according to a new report from Moody’s Ratings. For residents, that could mean more choice, steadier rents, and a less overheated housing market.

What residents can expect

Moody’s says over 150,000 new homes are scheduled for delivery between 2025 and 2027. That’s about a 20% jump in Dubai’s housing stock. The report forecasts this wave of supply will lead to “a modest price correction starting in 2026.”

For buyers, that may mean more bargaining power. For renters, it could mean relief after years of steep rent increases.

Why demand remains high

The dip won’t come from weak demand. Dubai’s population grew 6% in 2024 to 3.9 million, supported by economic growth and new visa policies. At the same time, household sizes are shrinking — now averaging 3.9 people compared with 4.4 in 2019 — pushing up the need for more housing units.

Wealthy newcomers are reshaping the market too. Dubai is now home to more than 80,000 millionaires, double the number of a decade ago. In the first quarter of 2025 alone, over 590 homes priced above Dh20 million were sold, the highest in two years.

This mix of population growth and high-net-worth arrivals means demand is unlikely to collapse. Moody’s describes the outlook as “stable over the next 12 to 18 months, supported by strong demand fundamentals and macroeconomic resilience.”

Apartments vs villas

The type of home matters. Villas have been the big winners since the pandemic, with prices climbing 20% in late 2024 compared with the year before. Apartments rose 18% in the same period.

Moody’s expects villa demand to stay strong in the near term but warns growth will slow as more communities are delivered. Apartments, especially in mid-market areas, may see sharper price declines once supply outpaces demand.

For buyers, that could mean better deals on flats. For families, villas will remain pricey but with less aggressive increases.

Developers stronger than before

One reason residents may feel more secure this time is that developers are financially stronger.

• Emaar’s revenue backlog has soared to Dh129 billion in 2025 from Dh25 billion in 2020.

• Major builders have slashed their debt levels, with average leverage dropping to 1.4x in 2025 from 4.8x in 2020.

• Combined profits for the six biggest developers reached Dh46 billion in the past year, up from Dh12 billion five years earlier.

Moody’s says this means builders can keep projects moving, even if prices soften.

Rules that protect buyers

The past decade has also seen big regulatory changes to protect residents. Off-plan buyers’ money must now be placed in escrow accounts, only released to developers once construction milestones are reached. Developers also face stricter launch requirements, ensuring land and approvals are secured before sales begin.

Moody’s says these reforms “help safeguard buyers but also support long-term growth by mitigating systemic risks.”

In Sharjah, a new escrow law will take effect this year, bringing protections closer in line with Dubai and Abu Dhabi.

What it means for you

• Thinking of buying? Expect more choice and potentially softer prices from 2026.

• Renting? Extra supply could ease the pressure on rents, especially in apartments.

• Investing? Villas and luxury homes remain in demand, but competition is growing fast.

Moody’s sums it up: despite rising supply, the UAE housing market “will remain stable” — giving residents more security, whether they’re renters, buyers, or long-term investors.