#Dubai Real Estate Market Hits Record Home Sales - Bloomberg

Dubai Real Estate Market Hits Record Home Sales - Bloomberg

If you think Alex Zagrebelny’s latest project sounds like something out of a science fiction movie, you wouldn’t be wrong.

The Dubai-based developer is constructing Eywa, a 21-story residential tower designed to look like the Hallelujah Mountains from the Avatar movies. Other elements of the plan borrow from principles of Vastu Shastra, an architectural science with origins in ancient India: Embedded in the building’s foundation is a 14-tonne pyramid fashioned from 1,450 crystals and semiprecious stones. When construction wraps up in 2026, bedrooms will be lined with materials that supposedly protect residents from electromagnetic fields.

“I use architecture and design as a language to speak with the outside world about what should not be lost for future generations,” Zagrebelny says. Already, he’s sold 16 homes in Eywa, at prices from $2.7 million to $7.5 million.

Eywa is the sort of development that has some observers wondering if the Dubai real estate market—which has been on a tear since 2020—is a bubble ready to burst. Only time will tell if the outlandish project and others like it are warning signs of a coming slowdown or successfully timed entries into a city that’s desperate to shed its reputation for boom-and-bust real estate cycles.

Both outcomes seem equally possible. On the one hand, foreign professionals continue to pour into Dubai, pushing prices ever higher. Cheerleaders for the emirate are quick to point out that lenders have maintained stringent rules and will only offer mortgages for about 80% of a home’s value—a sign that the market and regulation around it are maturing. Plus, developers are required to pay for land in full before construction even starts.

But critics note that the booming property market has lured scores of new developers, with nearly a quarter of a million homes on track for completion in the next few years. That would represent a 30% increase in the supply of housing in Dubai, according to real estate services firm Jones Lang LaSalle Inc.

“Almost every week, we meet three new developers that we’ve never heard of before,” says Sean McCauley, chief executive officer of Devmark, a consultant for developers in Dubai. Land prices have surged, he says, pressuring potential margins for new players. “Increasingly, it’ll be hard to make the math work.”

Dubai’s housing boom began in late 2020, when the United Arab Emirates’ high Covid-19 vaccination rates, rapid reopening to tourists and liberal visa policies began to attract more foreign buyers. Wealthy investors from Russia, crypto millionaires and Indians seeking second homes flooded in.

This year the volatility caused by US President Donald Trump’s global trade war has further lifted the market. The administration’s policies have sent the dollar tumbling to its worst first-half performance since 1973. Because the dirham is pegged to the dollar, the weakened currency has given foreign buyers—especially those from European countries—far more buying power.

“This is the biggest market driver,” says Taimur Khan, the head of research for the Middle East and Africa at JLL. “You get a massive discount. And if the dollar recovers, you get another bump up on any exit returns you might have.”

Thanks to those factors, there’s never been a better time to be in real estate in Dubai. Home prices have soared 70% since the end of 2019, according to JLL data. The city saw 51,000 home sales in the second quarter of 2025—a new high, according to Knight Frank, a real estate consulting firm. That brought the total value of transactions for the year through June to $73 billion, a 41% increase from the same period in 2024.

Real estate firms are hosting expos in London, Paris and other major cities and pitching wealthy Europeans on the merits of buying a second home in the emirate. “There’s good hospitals, good schools and good infrastructure—Dubai ticks all those boxes in spades,” says Michael Belton, chief executive officer of the property firm Mered, which is constructing a 66-floor residential tower with 310 units that’s scheduled to be completed in 2027. The development’s 40th floor will offer an infinity pool with panoramic sea views; Mered says it’s already sold nearly half the tower.

Still, it’s not hard to find lingering symbols of the real estate excesses that brought Dubai to the brink of bankruptcy less than 20 years ago.

Take “the World”—an archipelago of 300 manmade islands in the Persian Gulf that state-owned developer Nakheel PJSC spent $13 billion to create in 2008. Tumbling prices and mounting debt at parent company Dubai World eventually led to a bailout from neighboring Abu Dhabi. The developer was forced to suspend work on all its projects once the global financial crisis hit later that year.

Sales ground to a halt. Dubai’s leaders ultimately had to call time on what had been a decade-long, debt-fueled building and acquisition spree. The emirate later suffered a second housing bust after the price of oil crashed in 2014, further delaying developments across the city.

That history is not deterring developers today. Josef Kleindienst has spent nearly two decades developing the Heart of Europe—a $6 billion collection of properties built across six of the World’s islands that promises to combine “the best of European culture, architecture and hospitality” with the luxury and white sand beaches Dubai is known for. In 2024, Kleindienst was finally able to open the project’s first hotel, the Voco Monaco Dubai, an InterContinental Hotels Group property that features a “raining street” where guests cool off on the way to a French Riviera-style beach club. Next up: replicating the watery streets of Venice.

Supporters note that Dubai’s market fundamentals are sounder today than they were in 2008. Two decades ago, the real estate mania was largely fueled by foreign investors flocking to the emirates to make speculative property bets. This time, wealthy foreigners are increasingly making Dubai their home, at least for a while.

“The market is increasingly being shaped by genuine buyers rather than speculators,” says Will McKintosh, a regional partner for the Middle East and North Africa at Knight Frank. He notes that less than 5% of buyers now resell their properties within 12 months of purchase, compared with 25% in 2008. Real estate leaders are hoping more of them will stay for the long haul or even choose Dubai for retirement.

Despite facing years of regulatory obstacles and delays, Kleindienst says he thinks it’s only a matter of time before projects like his find their audience. He’s unfazed by the prospect of another potential real estate bust. “Dubai has its speed—the idea of these islands, they’re not walking away,” he says. “It’s only the question, does it come sooner or later? But it’ll come.”