UAE homebuyers more cautious as real estate prices expected to soften slightly
The residential property market in the UAE is entering a new phase of stability as it transitions from a period of rapid growth toward a more balanced phase partially tempered by the ongoing conflict in the region. According to a survey by Savills, nearly 45% of respondents still intend to purchase a home within the next 12 months.
While recent international events have introduced a level of caution among some participants, the underlying demand for housing remains strong across the region. The survey found that a further 32% of respondents are now undecided about property purchases, showing that buyers are taking their time considering purchases rather than abandoning the idea of purchasing property altogether.
The UAE is home to an incredibly large percentage of expatriates and foreign workers, constituting up to 90% of the total population. The survey highlights a relatively balanced and mature market, with a majority of respondents being resident expatriates, complemented by a significant share of non-resident investors. This mix reinforces the UAE’s dual positioning as both a long-term residence and an investment destination for many property owners.
The near-even split between renters and owner-occupiers, alongside a smaller investor segment, shows that the market is mainly defined by genuine end-user demand rather than purely speculative activity, according to Savills.
Buyers take a measured approach
There has been a notable trend towards cautiousness among buyers. This trend is particularly evident in the secondary market, where buyers are demanding clarity on pricing, property delivery, and immediate usability. Experts note that this period of deliberation reflects a maturing market where buyers are focusing on long-term value and location rather than speculative gains.
Approximately 60% of respondents indicated a preference for completed properties over those still in the planning stages. This move toward ready assets highlights a broader desire for stability in the face of shifting global conditions.
Most respondents (52%) said their main motivation for being in the market was to acquire an investment, though many also reported being interested in getting into the housing ladder and buying a second home. This shows that the market is largely driven by investment-minded buying, even in the current cautious environment.
Stable ownership and future outlook
A significant factor contributing to market resilience is the lack of selling pressure among current homeowners. Over 60% of existing owners plan to either maintain their current holdings or expand their portfolios in the coming six months. Only 4% of those surveyed expressed an interest in selling their properties, which suggests that the current market slowdown is not being caused by financial distress or forced liquidations.
Looking forward, more than 80% of participants expect property prices to either remain stable or soften slightly over the next 12 months. While transaction volumes may stay lower in the short term as buyers and sellers negotiate, the long-term fundamentals of the UAE remain robust. Sustained population growth and steady capital inflows continue to provide a firm foundation for the residential sector as it enters this more sustainable phase of development.
“While regional developments have understandably introduced a degree of caution into the market, the data clearly shows that demand remains intact,” said Andrew Cummings, Head of Residential Agency at Savills.
“What we are seeing is a shift in behavior rather than a drop in interest, buyers are taking more time, becoming more selective and focusing on fundamentals such as location, quality and long-term value. At the same time, the absence of widespread selling pressure reflects continued confidence among existing property owners. As a result, the market is moving towards a more balanced and sustainable phase, rather than experiencing any structural correction.”
