Over the next five years, Dubai is set to see over 350,000 new units (apartments, townhouses, and villas) hitting the market. With that kind of supply coming in, the big question is: will Dubai’s property prices hold up, or are we looking at a potential correction?

Key Data Points:

• Breakdown of New Supply: The biggest additions are in Jumeirah Village Circle (31.8K units), Business Bay (24.1K), and Dubai South (22.9K), followed by areas like Dubai Marina, JLT, and Dubai Hills Estate.
• Population Growth: Dubai’s population is 3.8M in 2025 and is projected to hit 4.3M by 2030. Based on what I see, the target is 4.8 m, but that number is quite high, hence I have indicated 4.3 M.
• Recent Market Trends: Since 2021, Dubai’s real estate market has been on an upward cycle, driven by foreign investment, economic growth, and government policies.
• Dubai’s Vision 2033: The government is pushing hard for Dubai to become a top 3 global city, attracting high-net-worth individuals and businesses.

Will There Be an Oversupply?

Looking at the numbers, 350K new units vs. a 500K population increase works out to around 1.43 people per unit. That immediately sounds like an oversupply risk!

However, let us analyze things further.

• Luxury properties in Palm Jumeirah, Downtown Dubai, and Dubai Hills will likely see steady demand, as it caters to higher net worth individuals, and expats who either have the capital, or have housing allowances, to help them pay or offset rentals.
• Affordable areas like JVC, Dubai South, and Damac Hills 2 could see more pressure on prices if supply outstrips demand.

Will Prices Drop or Keep Rising?

Why prices could hold steady or rise:

• Dubai remains tax-free with strong foreign investor demand.
• Developers might slow down project launches if demand weakens.
• Dubai’s growing economy and increasing population could absorb most of the new supply.

Why prices could soften in some areas:

• A lot of new units are in mid-tier communities like JVC and Business Bay, where oversupply could lead to price stagnation or slight dips.
• The post-Expo 2020 boom has been great, but can it sustain long-term? Qatar saw a real estate dip after the 2022 World Cup, so there’s a risk of history repeating itself if demand slows.
• Dubai’s tax free status is not totally tax free to all nationalities. A few countries, such as India, will tax residents for income earned in Dubai. (Do note that this might be avoided, with proper tax planning. One way might be to form a company to hold the asset, and allow the income to be taxed in Dubai. Since India and Dubai have Double taxation agreements, this might lead you to be taxed at 9% instead of the headline tax rate in India. However, do note that this is something I am exploring right now, and I don’t have the answers yet. Any tax lawyers, please do chime in.)

Final Thoughts

Dubai’s real estate market is fundamentally driven by demand, not just speculation. But not all areas will perform the same way. Some districts may see price corrections, while prime areas will likely stay resilient.

I will highly recommend either going with growth areas (low price per sqft), areas with low supply (based on current data), or places with limited land parcel.

What do you think? Are we in for continued growth, or is a price dip inevitable?

Where would I invest? Based on the data;

1. Expo City
2. Al Furjan
3. Dubai Silicon Oasis

Based on areas which I see growth and potential:

1. Expo City
2. Mohammad Bin Rashid City
3. Dubai Islands
4. Aldar’s future launch in Athlon

#Dubai#Realestate#Property