Swiss bank UBS has placed Dubai fourth among 23 cities in its latest Global Real Estate Bubble Index, with the emirate's score rising slightly to 1.16 from 1.09 a year earlier.
Second-quarter data show inflation-adjusted home prices in Dubai up just 0.4 per cent year on year, while real rents fell 4 per cent. Nominal residential prices grew a stronger 1.9 per cent, with apartments up 1.3 per cent and villas up 5.7 per cent, pointing to a market that is still expanding but at a noticeably slower pace than in previous quarters.
Despite the higher bubble-risk score, UBS said Dubai remains one of the more affordable major cities in the world for buying a home: purchasing a 60-square-metre apartment near the city centre requires roughly five years of average household income, compared with 11 years in London and 15 years in Hong Kong.
The bank noted that despite elevated mortgage rates, Dubai remains one of the few markets where homeownership stays relatively attractive given the high cost of renting, a dynamic that continues to draw both residents and investors into the sales market rather than the rental one.
Emaar Properties founder Mohamed Alabbar has separately forecast a price correction of 5 to 10 per cent tied to recent regional tensions, with the market expected to find a firmer balance from 2027 onward, as developers and buyers adjust to the current slower growth phase.