Dubai’s property market could enter a period of moderate price adjustment after years of rapid expansion, as regional instability weighs on transactions and changes short-term expectations among buyers. Emaar Properties founder and chairman Mohamed Alabbar expects average real estate prices in the emirate to decline by around 5% this year, even as the developer maintains confidence in Dubai’s longer-term growth.
The forecast comes at a time when the market is absorbing several competing forces. New projects continue to reach completion, developers are preparing major communities and investment remains substantial. At the same time, geopolitical disruption across the Middle East has affected travel, business activity and consumer sentiment, creating a more cautious environment for large purchases.
In an interview with Reuters, Alabbar said Emaar’s property sales had improved from their recent lows but remained roughly 50% below levels seen before the regional conflict. He attributed the expected 5% average decline in Dubai property prices this year to the effects of the conflict.
Supply continues to expand despite softer sales
The slowdown in transactions does not mean that development activity has stopped. Dubai continues to add substantial volumes of new real estate, highlighting the difference between weaker short-term demand and developers’ longer investment horizons.
The number of property projects completed across Dubai increased by 39% during the first half of 2026 compared with the corresponding period a year earlier, according to Dubai Land Department data cited by the UAE state news agency. The combined investment value of those completed developments exceeded AED 111 billion, or approximately $30.2 billion, representing an annual increase of 52%.
That expansion of supply will be an important factor for investors to watch. A larger selection of completed and off-plan properties gives buyers more choice and could make pricing, location, construction quality and payment terms increasingly important when projects compete for demand.
Rather than signalling a broad retreat from Dubai, the changing environment could therefore lead to greater differentiation between individual projects. Properties in established districts, developments with strong infrastructure and projects backed by financially stable developers may respond differently to softer market conditions than more speculative offerings.
Emaar retains a major revenue pipeline
Emaar itself enters this period with a significant volume of contracted business. Alabbar said the company’s revenue backlog exceeds $50 billion, providing visibility over revenue that can be recognised as projects progress. Collection rates, meanwhile, remain comparable with 2025 despite the disruption affecting the wider region.
The developer is also preparing for another major expansion in Dubai. In June, Emaar announced plans for an urban district with an estimated development value approaching $55 billion and capacity for around 150,000 residents.
The scale of the planned community illustrates the company’s longer-term view of demand. Alabbar indicated that the project could move forward once tensions between Iran and the United States ease, suggesting that Emaar sees the current weakness as a disruption rather than a permanent shift in Dubai’s growth trajectory.
For investors, however, the combination of slower sales and increasing supply creates a different market from the rapid appreciation phase that followed the pandemic. If the anticipated price adjustment materialises, buyers could gain greater negotiating power while developers may have to compete more aggressively through payment plans, product quality and project positioning.
Property outlook is linked to broader regional recovery
Dubai real estate is also closely connected with tourism, aviation and international capital flows. The regional conflict has disrupted all three, adding another layer of uncertainty to the property market.
Emaar’s hospitality business provides an indication of the scale of that disruption. According to Alabbar, occupancy at the company’s Dubai hotels had previously been around 83% before falling to approximately 20–25% during the conflict. It has since recovered to about 60%.
Alabbar expects occupancy to gradually return toward normal levels over the next 12 months as international flight capacity improves and travel conditions stabilise.
The property market may follow a similar pattern. A 5% decline in average prices would represent a correction after a prolonged period of expansion rather than, by itself, determine the direction of the market over the longer term. Much will depend on the duration of regional instability, the pace at which international demand returns and how quickly Dubai’s expanding supply of new homes is absorbed.
For property investors, this means the next phase of the cycle may be defined less by broad market-wide appreciation and more by individual project fundamentals. Entry price, rental potential, location and developer strength are likely to become increasingly important as Dubai moves through a more selective investment environment.