Is the Dubai property correction finally here?

Residential property growth (finally) cools, though commercial property is still red hot: Official data from Dubai Data and Statistics Establishment confirms what analysts have been saying for months now — that the property market is entering a cooling phase after several years of outsized gains.

Annual residential price growth slowed to 7.5% in 3Q 2025, down from around 11% in 2Q, according to the data (pdf). The divergence points to a maturing residential cycle even as parts of the commercial market continue to see firm pricing momentum.

It’s not broad-based: The commercial sector is still showing late-cycle strength, with prices accelerating 13% y-o-y from 10.2% last year, according to separate data (pdf).

Villas volatile, flats steady: Annual price growth for villas eased to around 9% in 3Q from 18.3% in 2Q, while on a q-o-q basis, prices fell 2.1%, separate DDSE data (pdf) shows. Apartment prices showed more stability, rising 6.8% y-o-y and 1.1% q-o-q. The trend held up from 2Q, when — as we previously reported — villa prices were up 18.3% y-o-y, as opposed to just 7.6% price growth for apartments.

Commercial property pricing was more nuanced in 3Q. Office prices continued to drive overall growth, with prices up 21.9% y-o-y, pushing the headline commercial index up c.13% y-o-y.

On a quarterly basis, commercial property prices increased 3.69%, accelerating from 2.2% in 2Q, according to separate DDSE data (pdf). Shops and hotel rooms recorded the weakest momentum in the quarter, while offices and hotel apartments continued to show relative resilience.

REMEMBER- Oversupply on the residential front is causing market pressures…: As we’ve reported, developers face growing supply risks, with over 350k homes registered for delivery between 2026-2030 — nearly double Dubai’s historical average. Even assuming 70% completion, annual deliveries would average 66k units, creating potential headwinds in districts like Jumeirah Village Circle, Dubai South, Expo City, and Dubailand.

…while tight supply on the commercial front is driving price momentum: New office supply remains limited, with only some 1 mn sq ftof space due by early 2026 already largely pre-leased, keeping pressure on availability in established business districts.

Looking ahead

Analysts expect slower gains in 2026. Knight Frank forecasts prime residential prices rising 3% and mainstream apartments 1%, while Fitch has been forecasting a 10-15% correction.