Is Dubai’s Real Estate Market Facing a Bubble?

Dubai’s Real Estate Market

Not according to the most recent findings from the UBS Global Real Estate Bubble Index for 2023, released last week.The UBS Global Real Estate Bubble Index “traces the fundamental valuation of housing markets and the valuation of cities in relation both to their country and to economic distortions (lending and building booms).”Based on the findings of the report, “Given strong income growth and a red-hot rental market, with rental growth even surpassing owner-occupied price growth, we see the market as fairly valued. This is based on an index that uses the following risk-based classifications: depressed (score below –1.5), undervalued (–1.5 to –0.5), fair-valued (–0.5 to 0.5), overvalued (0.5 to 1.5), and bubble risk (above 1.5).

Dubai Real Estate Market

The index score is a weighted average of the following five standardized city sub-indices: price-to-income and price-to- rent ratios (fundamental valuation), change in mortgage-to- GDP ratio and change in construction-to-GDP ratio (economic distortion), and city-to-country price ratio. The city-to-country price ratio in Dubai is replaced by an inflation-adjusted price index.

“Recognizable indicators include prices soaring beyond local incomes and rents, as well as imbalances in the broader economy, such as excessive lending and construction activity. To assess the risk of a property bubble, the UBS Global Real Estate Bubble Index examines these patterns, though it does not predict when or if a correction will occur. Factors like shifts in macroeconomic conditions, changes in investor sentiment, or substantial increases in housing supply can potentially trigger a decline in house prices.”

However, in Dubai, there continues to be a “demand greater than supply” equation, as both the population and tourism continue to increase.

These factors, along with high capital appreciation rates, high long-term and short-term rental returns in a stable, safe, and tax free city that is becoming a global hub continue to drive the luxury real estate market to surpass most others, globally, as for buyers/investors.

Read the full report findings, HERE.

To learn how to invest in the Dubai Luxury Real Estate Market, download below


Back to Blog

Latest Posts

  • Dubai Maritime City

    Why Dubai Maritime City Is the Future of Real Estate Investment? Here’s Why

    Dubai’s real estate market continues to captivate global investors, with Dubai Maritime City emerging as a premier destination for waterfront developments. Among these, The Mural by Omniyat Dubai Maritime City stands out, offering a unique blend of luxury living and promising investment potential. Strategic Location and Connectivity Strategically nestled between Port Rashid and Dubai Dry […]

    Read more
  • Dubai Business Setup & Opportunity Every U.S. Entrepreneur Must See!

    UAE Ranked #1 for Entrepreneurship—Why It’s a Game-Changer for Real Estate Investors

    UAE Ranks #1 for Entrepreneurship—Here’s What That Means for Global Real Estate Investors The UAE has once again been named #1 in the world for entrepreneurship—for the fourth year in a row—according to the Global Entrepreneurship Monitor (GEM) 2024/2025 Report. As a global Realtor® guiding investors into Dubai, California, and Spain, I see this milestone […]

    Read more
  • Role of Real state Agencies in Dubai

    The Role of Real Estate Agencies in Dubai: A Comprehensive Guide for Global Investors

    Dubai’s real estate market has become a prime destination for global investors, thanks to its tax-free environment, world-class infrastructure, and lucrative investment opportunities. However, navigating the market requires more than just selecting a property. The role of real estate agencies in Dubai is critical, as they do much more than facilitate transactions—they guide investors through […]

    Read more
  • UAE’s Investment Surge What It Means for Dubai Real Estate Investor

    UAE’s Investment Surge: What It Means for Dubai Real Estate Investor

    The United Arab Emirates (UAE) continues to establish itself as a leading destination for foreign direct investment (FDI), issuing over 200,000 new economic licenses in 2024 across various industries. This economic expansion, driven by new laws and business-friendly regulations, makes the UAE—and specifically Dubai—a prime market for real estate investors. As a Certified International Property […]

    Read more

Join us

Edit Search

  • Email Updates
  • Only Update me On
Close
Email Sent! Your email was sent successfully
Close
Register
  • Thank You For Registering

    Just a few more details so we can help you

    (All fields are required)

    When are you looking to purchase?
  • Thank You For Registering

    Just a few more details so we can help you

    (All fields are required)

    Need assistance with financing?
  • Thank You For Registering

    Just a few more details so we can help you

    (All fields are required)

    Need to also sell your property?
GG Benitez International Logo
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.