Dubai Realty: Price Fall Sparks Market Balance

Rental Price Drop: A Healthy Correction for Dubai's Realty

Market

After four years of continuous increase, Dubai's real estate market may be on the verge of a correction – at least according to one leading development company. They predict that a 10–20 percent decrease in rental prices could have a beneficial impact on the market's health and sustainability in the long run.

Rental Correction: Inevitable and Beneficial

In recent years – particularly following the pandemic – Dubai's rental prices have increased significantly. Rising demand and global uncertainties made Dubai an attractive destination for investors. However, this momentum now appears to be easing as supply increases, with new residential projects being completed and growing competition among landlords putting more pressure on rental prices.

Experts believe this decrease is essential: a market with overpriced properties is unsustainable, particularly if it risks deterring new investors. A 10–20 percent reduction could help restore balance between supply and demand, while also making the market appealing to those seeking long-term housing solutions.

New Homes, New Direction: Supply Set to Grow from 2025

One of the real estate market's critical drivers is supply expansion. In the first quarter of this year alone, nearly 8,000 new residential units were handed over, with forecasts suggesting this figure could reach 71,000 for the entire year. In 2026, over 80,000 new units are expected, while nearly 59,000 may enter the market by 2027. This volume alone can significantly affect rental prices.

For developers, this could be an important period: those offering quality housing, good locations, and adequate services will remain in demand – even if prices undergo slight corrections. Investors planning long-term can now gain an advantageous position.

Lack of Quality Contractors: New Challenge in the Industry

As the number of developers grows, reliable and experienced contracting firms are not keeping up with demand. This presents a new challenge for market players. Developers who can deliver on time and with quality can gain a significant competitive edge – but this requires an adequate contracting background.

The current market situation is further complicated by the fact that most contractors prefer to work with developers who have a stable history, financial reliability, and a good reputation. This means that newer, less-known developers may face significant challenges during the construction phase.

Open Doors for Regional Contractors

Experts state there is a need for more contractors in the region – particularly from countries like Oman, Bahrain, Saudi Arabia, or India. There is massive demand for construction services in Dubai and across the UAE, with the market open to new players. Business setups, employee hiring, and visa processes are straightforward, further enhancing the emirate's competitiveness.

Developers coming from other countries often do not bring their contracting background – although this could be advantageous for them in the future. Well-established partnerships and integrated contracting solutions can reduce project times, enhance quality, and improve customer satisfaction.

Summary

Dubai's real estate market is currently in a transitional phase: following fast growth, a mild correction may occur, affecting both rental prices and costs. However, this is not a sign of decline; rather, it is the basis for sustainable and healthy development in the long term. Continued supply expansion, the ongoing presence of international investors, and the market's flexibility still ensure Dubai's place as one of the world's most attractive real estate markets – provided that contracting capacity can keep pace with growing demands.

(Source of the article is a statement from the president of Danube Properties.)