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Dubai Property Cools After 5-Year Boom
26 Jun
Summary
- Dubai's housing market is cooling after a five-year rally.
- Buyers are negotiating harder for smaller, lower-cost homes.
- Annual price growth slowed to 4-5% from 17-18%.
Dubai's once-booming residential property market is experiencing a noticeable cooling trend after a five-year rally. Buyers are now more price-sensitive, negotiating harder, and increasingly favoring smaller, lower-cost homes. This shift is driven by a combination of higher property supply and ongoing geopolitical uncertainties.
While property values remain higher year-on-year, quarterly price growth has softened considerably. Nominal annual growth has decelerated to approximately 4-5%, a sharp drop from the 17-18% seen in 2024. This cooling is evident across various property types, including apartments and villas, in both sales and rental markets.
Developers are responding with incentives, offering discounts ranging from 5-10% on under-construction projects, along with waivers on Dubai Land Department fees and extended payment plans. Some previously signed agreements are also being renegotiated, with adjustments averaging between 12% and 15% in selected cases. The median value of property transactions in the second quarter through June 24 fell by 17% year-on-year, signaling a clear preference for more compact homes with modest price tags.
