S&P sees sharper Dubai home price correction in 2027

Summary

• S&P Global expects Dubai residential prices to correct further in 2027 as new supply lands.
• Unit count is set to rise roughly 20% through 2028, with apartments most exposed.
• Prices already fell 5–15% since late 2025, and transactions dropped 26%.

The latest

Dubai's residential market is heading into a deeper price correction in 2027, with the housing stock set to expand by about 20% as a wave of new units completes, S&P Global said in a report. The agency expects transaction volumes and prices to decline gradually rather than sharply, and said prices could instead stabilize if regional geopolitical risk recedes.

Details

• The supply wave: S&P projects a large volume of new units entering the market across 2027 and 2028, led by apartments, lifting Dubai's total residential stock by roughly 20%. The agency expects that supply to drag on both deal volumes and prices, though gradually given continuing economic and regulatory support.
• The numbers: Monthly residential sales averaged 12,644 between March and September 2026, down 26% from 17,198 in January and February, according to Dubai Land Department data cited in the report. Prices fell 5% to 15% from end-2025 through September 2026, concentrated in areas absorbing large handovers.
• Partial rebound: Activity recovered over the summer, with transactions rising from about 10,300 in May to close to 14,000 in each of June and July, according to the report. S&P still describes the overall post-conflict correction as relatively moderate across the seven months that followed.
• What is cushioning it: S&P attributes the moderate correction partly to a changed investor mix, with more long-horizon buyers including owner-occupiers, long-term landlords and wealthy international families — segments less sensitive to cyclical swings. Regulatory improvements are cited as a second support.
• Government support: The third factor is state backing, including mortgage access for off-plan purchases under conditions capping the loan-to-value ratio at 50%, the agency said. Off-plan property accounted for about 70% of Dubai's registered residential sales in 2026.
• Developer payment plans: Developers have leaned on schedules letting buyers pay 20% to 30% of the price during construction and defer the balance until handover, S&P said. That structure helped the off-plan segment hold asking prices better than the secondary market.
• Apartments vs villas: Apartment prices are expected to fall more sharply than villas in 2027, given the large pipeline under construction and a projected slowdown in population growth after years of rapid expansion. Dubai's population reached 4.6 million in 2025, up 7.8% year on year.
• The big developers: S&P judges the credit positions of four rated Dubai developers — Emaar Properties, Damac Properties, Sobha and Omniyat — as comfortable, citing revenue backlogs covering two to six years and limited payment delays. Emaar's backlog reaches $37 billion against $21 billion at Damac.
• The risk: The agency expects buyer payment delays to rise over time. In past downturns, including the 2015 correction and the pandemic, delay rates at major developers ranged between 3% and 10%, while the figure could be "much higher" at newer, less experienced developers.
• Financial policy: S&P expects rated companies to keep conservative financial policies, with dividends staying discretionary and tied to group performance and surplus liquidity. Backlogs and liquidity give the largest developers room to absorb falling sales and a price correction.

Background

The report ties the slowdown to regional conflict, noting activity weakened in the months after fighting broke out. The UAE private sector, meanwhile, has kept its strongest growth pace in 20 months despite mounting price pressures.

Between the lines

The agency's two scenarios hinge on geopolitics, not supply: the same 20% stock increase produces either a correction or flat prices depending on whether regional risk fades. The structural cushions S&P names — long-horizon buyers, 50% loan-to-value caps, deferred payment plans — keep the decline gradual, but also concentrate exposure at the newer developers it expects to see the sharpest payment delays.

What's next

Watch Dubai Land Department monthly transaction counts for whether the summer rebound holds, handover volumes through 2027 and 2028, and developer disclosures on buyer payment delays and dividend decisions.

Source: S&P Global, Dubai Land Department, Bloomberg