With the recent release of UBS’ Global Real Estate Bubble Index 2025, Dubai has moved from 0.64 moderate risk score to 1.09 elevated risk score.
Last year, Dubai’s score was very healthy – demonstrating Dubai’s strong real estate market. But after an 11% increase in property prices over the past 12 months, Dubai has now been classified in the “elevated risk” zone by UBS.
Naturally, this news has caused some uncertainty with Dubai real estate investors and end-users. To discuss the index, we sat down with Ahmad Khalifa, Property Legacy Head of Sales, who explained why this type of shift is normal in a fast-growing market like Dubai, and why it remains one of the world’s safest and strongest real estate markets.
Positive Factors
Temporary Decline in Construction Completions this Year
Firstly, it is important to recognize that the unsustainable price surges in property prices are primarily caused by temporary supply shortage.
This year, the number of completed projects has been lower when compared with 2024 – a natural and normal part of construction cycles. Large real estate projects often take several years to complete, and we are currently in what could be described as a gap period. Many completions are expected in the coming years, which will ease demand pressures as new supply enters the market. This will almost certainly bring more balanced long-term growth.
Population and Tourism Growth
Dubai’s population recently hit 4 million – a 15% increase when compared with 2020. On top of this, tourism is also hitting record highs. This strong demand has pushed property prices higher – a key reason behind the elevated UBS risk score. However, somewhat paradoxically, this has been extremely positive for investors, with rising demand driving increased rental income and capital appreciation.
Pricing levels still globally affordable
Even with rice increases, Dubai remains incredibly competitive in terms of price per sq. ft – particularly when compared with other major cities such as London, New York, and Zurich. With its well-documented high rental yields, Dubai still remains one of the most attractive destinations globally for Real Estate investments.
Summary
All in all, I do not see this this “elevated risk” for Dubai as a red flag. In fact, it’s a normal feature of a fast-growing real estate market – and Dubai has consistently outperformed its global peers:
“Dubai’s has been a very special market in our selection, the market has broken all kinds of records in the past five years…” – Matthias Holzhey, Lead Author, UBS Global Real Estate Bubble Index during his interview with Bloomberg on 29 Sep 2025.
Dubai’s global competitiveness continues to attract tourists, residents, and investors who values quality of life, a secure living environment, good governance, and long-term stability. In 2026, with more completions on the horizon, I fully expect the market to stabilize again and Dubai to be back sitting atop the Global Real Estate Bubble Index.
Have questions about Dubai real estate?
If you have questions about anything you’ve read in this article, or the Dubai real estate market in general, our team is here to help. Simply send us a message or an email to [email protected] and one of our team will be more than happy to assist you.
