Dubai’s Property Market Shift - How Buyers Are Gaining Leverage in a Changing Landscape
- tom9622
- Apr 7
- 4 min read
The UAE property market is currently witnessing a significant shift in dynamics, with buyers gaining leverage over sellers for the first time in years. Recent data suggests that prices are starting to fall, revealing a market where developers and sellers are increasingly willing to lower prices to secure sales. Despite the prolonged period of price hikes and heavy reliance on outsized commissions, certain property indices, particularly those tilted towards off-plan sales, have begun to show signs of decline. This has led to a series of defences from market commentators, who suggest that these price drops are a one-off or that the methodology behind certain market indices needs to be revised. Some have even argued that ready markets remain resilient and unaffected by this trend.
Yet, the reality is that prices have been falling for several months, and this decline is gathering pace. The driving force behind this changing power dynamic is the increasing pipeline of property supply. More than 300,000 units are expected to be delivered over the next four years, with some estimates showing that the volume of homes currently on the market is the highest it has been in the last six years. This surge in supply is beginning to have a noticeable impact on prices, and developers who once thrived in a fiercely competitive market are now adjusting their strategies to retain liquidity.
One of the key adjustments from developers has been the rise of joint ventures with land banks or partnerships designed to reduce financial strain. Additionally, many developers are reviving tactics from previous cycles, offering significant discounts for upfront payments with the intention to move stock. This shift has resulted in properties staying on the market for longer periods, with some properties lingering unsold for the longest duration since February 2020.
These trends are not isolated to Dubai. Globally, we have seen similar patterns emerge. In the US, home sales dropped by 5% month-on-month, and sales of existing homes reached their lowest point in nearly three decades last year, despite a shortage of supply. In Dubai, the first recorded decline in land prices, coupled with reduced volumes, reflects a global trend. While some of the explanations have centred around concerns over supply chain issues, there is a growing realisation that prices have begun to diverge from their true replacement value. This divergence was most evident in the widening gap between off-plan and ready properties, which is now beginning to correct itself.
The refurbishment market has also been impacted by these changes. Buyers are increasingly able to negotiate lower prices, with more deals falling through as buyers have the power to walk away from overpriced properties. This trend is a direct result of buyer resistance, particularly regarding large down payments and the higher borrowing rates that are driving up the overall costs of homeownership. For new homes, the surge in supply has now reached a level that can satisfy over a year’s worth of demand, marking the highest level since the 2014 boom-bust cycle.
For retail buyers, this shift means greater choice and, crucially, more affordable options. In areas like Jumeirah Lake Towers (JLT), the median price for ready homes has dropped to AED 1,530 per square foot, compared to AED 2,370 for off-plan properties. The price gap is even more pronounced in areas like Dubai Land Residential Complex, offering buyers more competitive choices than ever before.
This change in the market is also reflected in the approach of brokers and speculators, who have long been influenced by analysts and market models that have encouraged financial risk. Homeowners who previously sold ‘put’ options in the off-plan market are now facing the realities of market corrections, with valuations inevitably reasserting themselves over time.
Investors, both seasoned and retail, are now preparing for the next stage in the property cycle. As always, investors must be ready for the fluctuations that come with any market, and it seems that those who have been prudent in understanding the cyclical nature of real estate are already adjusting their strategies. The smart money, as well as retail buyers, are now looking forward to opportunities that arise as the market enters this new phase, which is expected to bring more affordable options and a return to more realistic pricing.
As the cycle shifts, both buyers and sellers must adapt to the new reality of the market. For those on the hunt for luxury real estate, especially in prestigious areas like Al Barari, the landscape is evolving. While the market correction may seem daunting to some, it also represents an opportunity for those who are ready to navigate the changing conditions and take advantage of more attractive price points in the luxury sector.
For those looking to stay ahead in the ever-evolving Dubai real estate market, contact Maria Morris Global for exclusive insights into the luxury property sector. Our expert team is dedicated to helping you navigate the latest trends, identify investment opportunities, and secure your next prestigious property in Dubai’s most sought-after locations.
Reach out today to begin your journey towards luxury living.
