Dubai Property Prices Up 50% In 5 Years: Is Bubble Risk Rising?

Dubai and Madrid property markets have seen the strongest bubble risk increases in 2025.

According to Global Real Estate Bubble Index 2025 released by UBS on Tuesday, Dubai jumped from 14th to 5th position in the index while Madrid rose from 16th ranking to 10th.

“Since mid-2023, real prices have climbed by double digits and are now 50 per cent higher than five years ago, the strongest increase among all cities in the study. As a result, housing bubble risk has surged for a second consecutive year and reached an elevated level,” said the Swiss bank.

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It added that incomes are not keeping pace with home prices as Dubai's population has grown by nearly 15 per cent since 2020, with an immigration boom tightening the housing supply.“Moreover, building permits suggest new construction could reach levels last seen in 2017, and competition for offshore real estate investment with Abu Dhabi and Riyadh is intensifying,” UBS said in the annual report.

In the post-pandemic years, Dubai and the UAE have seen exceptional growth in population and demand for real estate units, both for ownership and rentals. This resulted in a very strong rally in the prices and rents over the four years.

Globally, Miami shows the highest bubble risk, while high bubble risk also appears in Tokyo and Zurich. An elevated risk is evident in Los Angeles, Geneva, and Amsterdam.

It said global housing markets continued to cool on average.

“Broad exuberance has faded, with average bubble risk in major cities falling for a third straight year,” said Matthias Holzhey, lead author of the study at UBS Global Wealth Management's chief investment officer.

UBS said Hong Kong is the least affordable city in the study, requiring about 14 years of income to purchase a 650 sqft apartment.

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