Dubai home prices fell for third straight month in May — but the correction is losing momentum

Dubai’s housing market correction continued in May — but the pace of decline is easing. Price falls extended into a third straight month, though the correction is slowing, and the market may be nearing a floor, according to the latest ValuStrat Price Index (pdf). The VPI dipped to 222.1 points in May, with citywide residential capital values down 1.2% m-o-m — an improvement on April’s 1.9% decline and well off March’s sharp 5.9% correction. Annual growth remains positive at 2.5%.

The pressure is not evenly spread. Older, supply-constrained villa communities continue to hold up well — older freehold villa prices remain 191% above post-pandemic levels and 78% above the 2014 peak. Apartment-heavy locations are showing more strain, with apartments more broadly seeing values fall 0.9% m-o-m and posting their first annual decline in six years, falling 1.4% y-o-y. Some communities bucked the trend, however — DIFC posted 10.3% annual gains, while Remraam and Dubai Silicon Oasis were also up solidly y-o-y.

The steepest annual declines were at Burj Khalifa (-13.9%) and Jumeirah Beach Residence (-9.9%), pointing to growing pressure in prime apartment stock.

Villas held up slightly better: Villa values fell 1.4% m-o-m but are still up 5% y-o-y, with established communities — Jumeirah Islands, The Meadows, and Emirates Hills — continuing to outperform.

Transactions are cooling sharply — but off-plan remains dominant. Oqood registrations dropped 29.3% m-o-m and were down 41.4% annually, yet off-plan sales still accounted for 77% of all residential transactions in May. The ready market had a rough month, with transaction volumes falling 18.5% m-o-m and shedding 55.1% y-o-y, suggesting buyers are still gravitating toward new launches despite the broader slowdown.