According to global credit rating agency Fitch Ratings, real estate prices in Dubai have reached their local peak in the current cycle. A moderate correction of no more than 15% is expected over the next 12–18 months. This forecast opens a window of opportunity for experienced investors who can think ahead and capitalize on a market characterized by increasing supply and stabilizing fundamentals.
The Market Enters a Phase of Balance: What the Numbers Say
Since 2022, residential property prices in Dubai have surged by approximately 60%, making the sector one of the region’s leading investment assets. This growth was driven by an influx of foreign investors, professionals, and high-net-worth individuals relocating to the UAE in the post-pandemic period. However, according to Fitch, this phase is nearing its end: property prices have either already peaked or are expected to do so in 2025.
The expected correction is driven by two primary factors:
· New supply outpacing population growth
Between 2025 and 2027, the residential market is expected to expand by 16% in supply volume, while population growth is forecast at only 5%.
· Relaxed payment terms on the primary market
Developers have begun revising their pre-sale requirements, shifting from the current 70% payment during construction to more accessible 50% plans. This adjustment lowers entry barriers and improves acquisition conditions for investors.
New Supply: Volume and Outlook
Fitch projects a record-breaking 120,000 residential units to be delivered in 2026. For context, only 30,000 units are expected in 2024, and 90,000 units in 2025. This sharp increase stems from the unprecedented number of new developments launched in 2023–2024. Importantly, the majority of these projects are financed through escrow accounts rather than direct bank lending, enhancing transparency and mitigating systemic risk.
Financing and Banking Sector: Control and Resilience
In the face of rising interest rates and tighter underwriting standards, UAE banks have scaled back direct lending to the construction sector. Between 2022 and 2024, corporate real estate financing declined by AED 66 billion, and its share in the total domestic loan portfolio fell to 14%.
Nevertheless, mortgage lending remains stable, accounting for around 8% of total loans, demonstrating a cautious yet steady approach by financial institutions toward the real estate sector.
GATE 11: Our Strategic Entry into Dubai
As part of our long-term
Road to 2030 strategy,
Summer Capital continuously analyzes real estate markets across the Middle East, with a focus on building a balanced portfolio centered on capital preservation and growth.
Among our strategic priorities are high-quality residential developments in the United Arab Emirates.
In 2025, we made our first official investment in the Dubai market through the
GATE 11 project—a development that combines thoughtful planning, prime location, and steady price dynamics. This investment reflects our rigorous approach to risk assessment and our commitment to long-term value creation.