Dubai Housing Supply to Rise 20% by 2028, S&P Says, With Prices Under Pressure

S&P Global Ratings expects Dubai's residential stock to increase 20% in 2027-2028. The firm said the new supply, alongside regional disruptions, could weigh on prices, reduce transaction volumes and accelerate corrections. Investor-driven apartment segments are particularly exposed.

The forecast is not one-way. S&P said prices could stabilize in 2027 if geopolitical risks ease, citing Dubai's market fundamentals and regulatory framework as supports. The balance matters: new homes can be absorbed if demand holds, but investor-heavy buildings tend to react faster when buyers turn cautious.

Dubai's industrial and logistics market remains firmer. S&P said demand stayed resilient on business expansion and supply-chain infrastructure investment. JLL reported near-full occupancy in prime industrial areas of Dubai and Abu Dhabi.

New Dubai industrial leases rose 25.7% year on year in Q3 2026, S&P said. Renewals fell 8.9% quarter on quarter but were 9.5% higher year on year. Some occupiers relocated or upgraded. Average Dubai industrial rents rose 5.9% annually to $13.61 per square foot, or AED 50, which S&P linked to limited modern warehouse and high-quality space.

In Abu Dhabi, JLL said average industrial rents reached $133 per square metre, or AED 489, up 1.6% year on year and 0.6% quarter on quarter. Regulatory limits on increases for existing properties moderated growth, though certain properties and new developments were exempt.

Upcoming Grade A warehouse developments should ease supply constraints, S&P said, but higher construction costs could delay some projects. KEZAD Group and Jingdong Property (JD.com) agreed to develop 150,000 square metres of automated warehousing. Axione planned a 37,000-square-metre cold-chain hub at Abu Dhabi Food Hub, and KEZAD Logistics Park 7 is set to add 88,135 square metres.

Regional disruption is changing inventory decisions. Businesses are reassessing supply-chain strategies, increasing safety stock and prioritizing more reliable overland routes. Abhishek Mittal, JLL's head of Industrial for MEA, said occupiers are moving into higher-quality facilities and redesigning supply chains for resilience. He said multimodal links, including the AD Ports Group-Etihad Rail bonded corridor, could speed overland transport across the GCC and strengthen the UAE's position as a regional logistics gateway.