Dubai’s property market continues to demonstrate remarkable resilience with inflation-adjusted home prices surging approximately 11% in 2025, significantly outperforming most major metropolitan markets globally according to UBS Group AG’s latest Global Real Estate Bubble Index. This growth trajectory, while drawing comparisons to overheated housing markets worldwide, is fundamentally supported by structural demand drivers rather than speculative excess.
The emirate’s extraordinary demographic expansion serves as the primary differentiator from other global cities. Since 2020, Dubai’s population has grown by nearly 15%, surpassing four million residents for the first time in 2025, with over 208,000 new residents added last year alone. This rapid population growth—characterized by a youthful demographic with 60% under age 35 and nearly 90% expatriate composition—continues to generate sustained household formation and rental demand.
UBS analysts note that while bubble risks have increased globally for the second consecutive year, Dubai’s risk profile remains below that of cities like Miami, Zurich, and Tokyo. Claudio Saputelli, Head of Swiss and Global Real Estate at UBS Wealth Management, explains: ‘Dubai’s population growth has tightened available supply and pushed rents higher. Over the past five years, rent increases outpaced home price gains, though property prices have recently begun to overtake rent growth as investment demand strengthens.’
Despite accelerating new supply with approximately 100,000 residential units scheduled for completion in 2026, market participants argue that historical delivery patterns show 30-40% of forecast supply typically experiences delays. When adjusted for construction slippage and matched against unprecedented population growth, supply remains broadly aligned with absorption rates.
Policy interventions have further reshaped market foundations. The Golden Visa program, issuing over 250,000 long-term residencies since 2021, has accelerated a strategic shift from short-term ownership toward permanent settlement. Transaction data from Betterhomes indicates cash buyers accounted for 49% of Q3 2025 transactions, while end-users represented approximately half of all transactions earlier in the year—signaling growing participation from residents purchasing primary homes rather than speculative investors.
International demand remains broadly diversified with buyers from India, the UK, Pakistan, Europe, Russia, North America, and sustained inflows from Gulf and MENA regions. This diversity contrasts sharply with overheated global markets where price growth has increasingly decoupled from income growth.
While UBS notes exposure to oil price volatility and rising regional competition from Abu Dhabi’s expanded investor incentives and Saudi Arabia’s planned international buyer zones under Vision 2030, Dubai’s first-mover advantage, regulatory clarity, and deep liquidity provide resilience that newer markets lack. Economic diversification across tourism, logistics, finance, and technology continues to support employment and wage expansion, helping cap speculative excess even as prices climb.
The challenge for Dubai’s market moving forward is less about abrupt correction risks and more about successfully managing growth—maintaining disciplined supply delivery, ensuring infrastructure development outpaces demand, and aligning policy with long-term residency objectives rather than short-term speculation.
