The real estate market in Dubai is set to enter a "moderate correction” in the second half of 2025 because of a record number of project launches, Fitch Ratings has said.
The correction – a phase in which price of an asset declines by 10 per cent or more – would run through 2026, but is not expected to exceed 15 per cent, as the strength of the prime real estate segment will support the rest of the market, the New York-based ratings agency said in a research note on Thursday.
While corrections that can last from days to months or longer could devalue asset prices and value of investment portfolios in the short term, they are also an opportunity for buying new assets at lower values.
Real estate prices in the emirate, the commercial and financial hub of the Middle East, have leapt by about 60 per cent from 2022 to the first quarter of 2025, Fitch data showed.
The market has maintained a robust momentum after bouncing back from the Covid-driven slowdown and its world-beating run was supported by government measure including multiple visa options for investors and policy measures that boosted ease of doing business in the emirate.
Over the past few years, there have been a record number of new property launches, which in turn will double unit deliveries in 2025 and 2026 compared to 2022 to 2024, "which could cause a price correction”, analysts at Fitch said.
"Assets in prime locations are more resilient to downturns and investor appetite for these assets, with longer investment horizons, should underpin their valuations. Delays in project completion might also alleviate pricing pressure,” Fitch said.
However, the ratings agency expects that banks as well as developers will be able to "tolerate” falling real estate prices, with the former in particular having a "solid ability to tolerate risks”, as banking sector exposure to property sectors fell to 14 per cent of total gross loans at the end of 2024, compared to 20 per cent at the end of 2021.
Despite the reduction in lending portfolio exposure, real estate still remains the largest component of banks' loan books. However, "while a drop in prices could lead to a moderate rise in stage 2 and 3 loans ratios at some of rated banks, we do not expect a sector-wide asset quality deterioration”, Fitch added.
Homebuilders, on the other hand, remain well funded, giving them a buffer to withstand a price correction as they have "reduced execution risk and have favourable pre-sales models, supported by robust order backlogs”, providing cash flow visibility, Fitch said.
Sustained demand from a growing population and heightened investor interest are driving property sales in Dubai. The property market has also been benefiting from government initiatives, such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE’s economy on diversification efforts.
Real estate prices in Dubai rose above their 2014 historical peak in early 2024 on high oil prices and regional political instability.
Abu Dhabi's prices, meanwhile, rose by 21 per cent since the pandemic, although they remain below 2014 levels. Other emirates also recorded increases since the pandemic, but considerably less compared to Dubai.
Dubai launched a record number of projects in 2024, resulting in a supply of an estimated 150,000 units, half more than 100,000 in 2023. Deliveries would spike in 2026, when about 120,000 units are planned for handover, compared to 30,000 in 2024 and 90,000 in 2025.
"This rate of project delivery roll-out will test the absorption rate of the Dubai residential market in 2026–2027,” Fitch analysts said.
While Fitch estimates a prices correction, Betterhomes among the biggest property brokerages in the emirate expects rising interest from buyers.
The move to impose sweeping global tariffs by US President Donald Trump is unlikely to affect prices in the UAE real estate market, Betterhomes said a separate report.
Interest is coming from US and Chinese investors, "signalling a renewed appetite for Dubai real estate as a stable and strategic investment destination”, said Louis Harding, chief executive of Betterhomes.
The sustained momentum of the emirates' economy, its strong tourism sector, high public spending and diversification efforts that continue to mitigate external risks, also add to the appeal of Dubai's property market, according to Betterhomes's report.
The years Ramadan fell in May
HIV on the rise in the region
A 2019 United Nations special analysis on Aids reveals 37 per cent of new HIV infections in the Mena region are from people injecting drugs.
New HIV infections have also risen by 29 per cent in western Europe and Asia, and by 7 per cent in Latin America, but declined elsewhere.
Egypt has shown the highest increase in recorded cases of HIV since 2010, up by 196 per cent.
Access to HIV testing, treatment and care in the region is well below the global average.
Few statistics have been published on the number of cases in the UAE, although a UNAIDS report said 1.5 per cent of the prison population has the virus.
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MATCH INFO
Uefa Champions League, Group B
Barcelona v Inter Milan
Camp Nou, Barcelona
Wednesday, 11pm (UAE)
Syria squad
Goalkeepers: Ibrahim Alma, Mahmoud Al Youssef, Ahmad Madania.
Defenders: Ahmad Al Salih, Moayad Ajan, Jehad Al Baour, Omar Midani, Amro Jenyat, Hussein Jwayed, Nadim Sabagh, Abdul Malek Anezan.
Midfielders: Mahmoud Al Mawas, Mohammed Osman, Osama Omari, Tamer Haj Mohamad, Ahmad Ashkar, Youssef Kalfa, Zaher Midani, Khaled Al Mobayed, Fahd Youssef.
Forwards: Omar Khribin, Omar Al Somah, Mardik Mardikian.
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
HEY%20MERCEDES%2C%20WHAT%20CAN%20YOU%20DO%20FOR%20ME%3F
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Thanksgiving meals to try
World Cut Steakhouse, Habtoor Palace Hotel, Dubai. On Thursday evening, head chef Diego Solis will be serving a high-end sounding four-course meal that features chestnut veloute with smoked duck breast, turkey roulade accompanied by winter vegetables and foie gras and pecan pie, cranberry compote and popcorn ice cream.
Jones the Grocer, various locations across the UAE. Jones’s take-home holiday menu delivers on the favourites: whole roast turkeys, an array of accompaniments (duck fat roast potatoes, sausages wrapped in beef bacon, honey-glazed parsnips and carrots) and more, as well as festive food platters, canapes and both apple and pumpkin pies.
Ruth’s Chris Steakhouse, The Address Hotel, Dubai. This New Orleans-style restaurant is keen to take the stress out of entertaining, so until December 25 you can order a full seasonal meal from its Takeaway Turkey Feast menu, which features turkey, homemade gravy and a selection of sides – think green beans with almond flakes, roasted Brussels sprouts, sweet potato casserole and bread stuffing – to pick up and eat at home.
The Mattar Farm Kitchen, Dubai. From now until Christmas, Hattem Mattar and his team will be producing game- changing smoked turkeys that you can enjoy at home over the festive period.
Nolu’s, The Galleria Mall, Maryah Island Abu Dhabi. With much of the menu focused on a California inspired “farm to table” approach (with Afghani influence), it only seems right that Nolu’s will be serving their take on the Thanksgiving spread, with a brunch at the Downtown location from 12pm to 4pm on Friday.
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
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MATCH INFO
Inter Milan 2 (Vecino 65', Barella 83')
Verona 1 (Verre 19' pen)
How Sputnik V works
Origin
Dan Brown
Doubleday
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What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
SPECS
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
UAE currency: the story behind the money in your pockets
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
UAE players with central contracts
Rohan Mustafa, Ashfaq Ahmed, Chirag Suri, Rameez Shahzad, Shaiman Anwar, Adnan Mufti, Mohammed Usman, Ghulam Shabbir, Ahmed Raza, Qadeer Ahmed, Amir Hayat, Mohammed Naveed and Imran Haider.
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
SPECS
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Shubh Mangal Saavdhan
Directed by: RS Prasanna
Starring: Ayushmann Khurrana, Bhumi Pednekar
