Major Change on the Horizon for the UAE Property Market: 150,000 New Homes Incoming

The real estate market in the United Arab Emirates is on the cusp of a significant shift. According to a recent analysis by Moody's, the largest ever increase in housing supply is expected between 2025 and 2027. More than 150,000 new homes will be added to the market, representing an increase of around 20% of the total housing supply in Dubai.

Increased Supply, But Demand Remains Strong

This enormous rise in supply could lead to a "slight price correction" from 2026 onwards, according to Moody's. Nevertheless, the market fundamentals remain strong. Dubai's population grew by 6% in 2024 to 3.9 million residents. Furthermore, the number of millionaires in the city has doubled over the past ten years to more than 80,000. In the first quarter of 2025 alone, more than 590 homes were sold for over 20 million AED (approximately €5,070,000), the highest number in two years.

The average household size is also decreasing, from 4.4 to 3.9 persons, meaning more separate homes are needed. This stimulates demand for smaller units, even with the rising supply.

What distinguishes this cycle from previous periods is the strong financial position of project developers. For instance, Emaar's revenue backlog rose from 25 billion AED in 2020 to 129 billion AED in 2025. The average debt burden among developers fell from 4.8x to 1.4x, and the combined profit of the six largest developers grew from 12 billion AED to 46 billion AED.

Regulations have also been tightened: with escrow accounts, stricter conditions for project launches, and phased fund disbursement based on milestones, the market is better protected.

What Does This Mean for Buyers, Tenants and Investors?

For buyers, it means extra choice and more room for negotiation from 2026. For tenants, it is good news: particularly in the apartment segment, some rental reduction is finally expected. Investors continue to focus on villas and the luxury segment, where demand remains strong, but competition will increase.

Moody's emphasises that this is about stabilisation, not a crash. Economic growth, the influx of affluent residents, and strong population growth provide a solid foundation. But with supply finally starting to catch up with demand, some air is being let out of the overheated market.