Dubai’s property market is growing rapidly, but the numbers show this is not a bubble — it’s a market expanding on strong fundamentals. Population growth is outpacing supply, with thousands of new residents arriving each month for jobs, business opportunities, and lifestyle advantages. Tourism is hitting record highs, foreign investment continues rising, and global companies are choosing Dubai as their regional base.
At the same time, Dubai remains more affordable than major global cities, while offering higher rental yields, making it highly attractive to investors. Mortgage debt is very low compared to Western markets, so the system is not overleveraged.
Although new off-plan launches may feel overwhelming, most inventory is absorbed quickly because household formation is growing faster than construction.
Bottom line: Dubai’s growth is steady, sustainable, and supported by real demand — not speculation. The city is building for the future, not inflating a bubble.
✅ 1. Why UBS Matters
UBS says Dubai’s real estate market is not in a bubble, showing balanced growth driven by strong fundamentals rather than risky speculation.
✅ 2. Key Indicators UBS Uses
A) Valuation indicators
- Price-to-Income Ratio:
✔ Dubai = 5 years
❌ London/Paris/Tokyo = 10+ years
❌ Hong Kong = 14 years
→ Dubai remains far more affordable. - Price-to-Rent Ratio:
✔ Dubai = 15 years of rent to recover property price
❌ Zurich = 43 years
→ Shows high yields, and prices not over-inflated.
B) Distortion indicators
- Construction-to-GDP:
Dubai = 5.5% → very healthy - Mortgage-to-GDP:
Dubai = 5.5%
UK/US/Japan = 50%+
→ Dubai is not over-leveraged, banks are safe, system is stable.
✅ 3. So why do people still worry?
One word: Supply.
There are many cranes and many upcoming projects.
But supply only looks scary when viewed alone.
✅ 4. Demand Factors That PROVE Dubai Can Absorb Supply
1️⃣ Population & Households
- Dubai population: 4.04M today
- Growing at: 5.8% yearly
- Households growing even faster: 7.8% yearly
(Families are moving, not just individuals.)
→ By 2029: ~1.19M households needed
→ Upcoming supply: ~1.249M units
📌 Almost perfect balance — NOT an oversupply.
2️⃣ Historical Completion Rate
Average completed units each year = 4.8% growth
→ Much lower than household growth (7.8%)
→ Means demand > supply in real delivery terms.
Also: most new units are studios/1BR,
while family units (2BR+) remain undersupplied.
3️⃣ Tourism & Short-Term Rentals
- 2023 Tourism: 18.7 million visitors
- Avg stay: 2.3 days
- Room nights needed by 2030: 69 million
- Dubai hotel capacity: only 62 million room nights
📌 Shortfall: ~19 million room nights
→ Perfect space for Airbnb / holiday home investment.
✅ 5. Economic Strength Supporting Long-Term Growth
- Dubai entered the Top 10 global power cities (rank #8)
- Massive infrastructure spending (roads, ports, corridors)
- Strong non-oil economy
- 1,117 new foreign investment (FDI) projects last year
- 53,000+ new jobs created in one year from FDI
All this equals more long-term real estate demand.
🚀 Final Investor Takeaway
Dubai is NOT in a bubble.
It shows:
- Strong affordability
- Strong rental returns
- Low debt exposure
- Massive population & tourism growth
- Healthy construction pace
- Long-term economic fundamentals
Pre-Construction 24 7 