Dubai’s housing market cools after long red-hot five-year rally

Dubai: Prices of residential properties in Dubai are showing signs of cooling after a five-year rally, as buyers turn increasingly cost-conscious, opt for smaller transactions and negotiate harder amid geopolitical uncertainty and growing supply.

While residential values remain higher than a year ago, industry executives said prices have softened on a quarterly basis to below the levels seen before the start of the West Asia conflict.

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“There has been downward pressure on prices — not a sharp correction, but a meaningful cooling. Prices are up annually, but have dipped Q-o-Q,” said Anuj Kejriwal, chief executive, EMEA, at real estate services company Anarock. Nominal price growth has slowed to around 4-5% year-on-year from 17-18% in 2024, he said. “Most of the current transactions are off plan, and transactions on the resale market have become more paced as buyers negotiate harder and longer,” he said.

Listings on property portal Betterhomes show an up to 15% fall in prices in some cases. Among 324 listings where prices have come down, the asking price of a four-bedroom villa in Arabian Ranches has been slashed by AED 2 million (₹5.1 crore) to AED 11.5 million (₹29.5 crore). A one-bedroom under-construction property in DIFC on Sheikh Zayed Road is now listed at AED 3.6 million, reflecting a 5.24% reduction from the initial price, while a one-bedroom ready property in Palm Jumeirah is listed at AED 3 million after a 7.7% cut in the asking price.

“Price readjustments aren't limited to one property type. The pattern is showing up across apartments, villas, and studios in Dubai, as well as family houses in both sale and rental markets,” read a blogpost on the Betterhomes portal.

Attractive Offers

In Dubai's current environment, buyers are “spending more time on listings, looking harder at price-per-square-foot relative to the area, and holding off on properties that feel overpriced against comparable options nearby,” it said.

While developers are broadly holding the base price for under-construction projects, they are offering flat and conditional discounts of 5-10%. Other offers include waiver of the 4% Dubai Land Department fee and extended post-handover payment plans.

“Tier-1 developers have largely maintained pricing and payment plans. Tier-2 developers are offering effective discounts and incentives in the 4-6% range, while some smaller developers have become more aggressive, with discounts reaching up to 8-9% in selective projects,” said Aditya Earnest John, a Dubai real estate expert.

There are also instances of previously signed agreements getting renegotiated, industry experts said.

“Market intelligence suggests that renegotiations of pre-signed agreements are occurring in certain projects, with adjustments averaging between 12% and 15% in selected cases,” said Sahitya Chaturvedi, secretary general of the Indian Business & Professional Council (IBPC), Dubai.

According to latest market data, the median value of property transactions in Dubai fell to AED 1.36 million in the second quarter through June 24, a 17% drop from AED 1.65 million in the same period last year, indicating a preference for lower-priced homes.

“We are seeing a notably higher interest for more compact homes with more modest price tags,” said Anarock’s Kejriwal.

Amid the moderation in demand, several big-ticket launches have been deferred to post-summer months. Emaar has announced a delay in tender issuance for its mixed-use development by three to four months, citing supply chain disruptions, port closures and rising construction material costs.