Dubai price dip is likely over the next 12 to 18 months, Moody’s said. The ratings agency expects property prices to cool as a large wave of new homes reaches the market. About 180,000 new units will complete between 2026 and 2028. As a result, analysts expect the market to face a supply boost unlike recent years.
Moody’s analysts said population growth will absorb much of the new supply. They also pointed to a shift toward smaller household sizes. Still, the sheer number of new units could slow price growth. They added that modest declines are possible in affordable apartments. Mid-market studio and one-bedroom segments may feel the strongest pressure.
The agency warned that developers may slow new project launches. They also predicted lower sales values for new units over the next year and a half. Analysts said this trend could continue for several years.
After five years of rapid growth, Dubai’s residential market now faces a turning point. Rising completions may outpace demand in some segments. Moody’s said developer sales could decline modestly as a result. The market averaged 30,000 to 40,000 new units annually in recent years. Now, it could reach about 60,000 units per year from 2026 to 2028.
Despite the expected slowdown, Moody’s said market fundamentals remain supportive. Population growth and a steady flow of high-net-worth individuals continue to support demand. Analysts also said rated developers remain financially strong. They cited strong revenue backlogs and early payment plans. These factors support credit resilience.
Moody’s also highlighted a shift in developer strategy. Strong cash generation could exceed domestic reinvestment opportunities. As a result, some developers may expand overseas or enter new sectors. Analysts said higher dividend distributions could support this shift. However, they warned that sustained cash extraction could weaken local companies. Smaller developers may face higher funding and execution risks.
Since 2023, UAE developers issued nearly $12 billion in sukuk, bonds, and hybrid debt. They also rely on customer instalments for off-plan projects and joint ventures. These funding streams will support ongoing construction, even as new sales slow.
Overall, the Dubai price dip outlook suggests a more balanced market. Buyers may find more options, while developers adjust to slower sales growth.
