Dubai property boom shows strain as investors face flipping slowdown

Dubai’s property market has experienced repeated boom-and-bust cycles since it opened to foreign buyers in the early 2000s. (Courtesy: Reuters photo)

Dubai’s property market is on the verge of breaking a record for uninterrupted growth, with prices having risen for 57 straight months. Fuelled by sales of off-plan apartments and luxury villas, the boom has lifted prices per square foot to 25 per cent above their previous peak in 2014. Demand has come from wealthy families seeking villas as well as investors drawn by lower costs compared with Western markets, the Financial Times reported.

Analysts caution that the surge in construction is testing the limits of demand. Nearly 93,000 new units have been delivered this year, the vast majority of them apartments. Between 2025 and 2027, about 150,000 homes are expected to be completed, raising fears of a glut. Moody’s predicts a “modest correction” from 2026, while Fitch has forecast declines of up to 15 per cent.

One of the sharpest signs of strain is in speculative resales of unfinished units. Known as flipping, the practice once made up a third of the resale market but has now dropped to just 20 per cent. Brokers report that investors trying to sell uncompleted apartments are struggling to find buyers. Some who bought on the promise of quick gains now face losses or prolonged waits until projects are finished.

Industry insiders say the luxury end of the market remains resilient, supported by wealthy buyers seeking high-end homes. But the apartment segment is seen as more vulnerable, with heavy supply threatening to undercut prices. Developers and brokers warn that disappointed speculators could compete aggressively to unload properties, adding pressure to certain neighbourhoods.

Dubai’s property market has experienced repeated boom-and-bust cycles since it opened to foreign buyers in the early 2000s. International investors argue that regulatory reforms have made the market stronger and less volatile. Still, analysts say no real estate economy can grow indefinitely. As one broker put it, “there’s no real estate economy on the planet that continues up, up, up.”

While some brokers believe the slowdown in flipping could be seasonal, linked to quieter summer months, the consensus is that rising supply will eventually soften prices. The biggest risk lies in segments with heavy new development, where competition among sellers is already mounting. For Dubai, the question is whether the current boom will ease into a controlled correction — or tip back into the sharp swings that have defined its property market in the past.