The Swiss bank UBS publishes an annual overview comparing the risk level of housing prices in major cities around the world. This year's edition, the twelfth, of the UBS Global Real Estate Bubble Index was published on 22 September 2026 and covers 23 cities, including Lisbon and Seoul for the first time. Dubai scored 1.16 and ranked fourth, in the elevated risk band.
Phrases such as "Dubai has an elevated bubble risk" sound more serious than the index is designed to convey. UBS does not claim that property prices in Dubai will fall. The index measures how far prices have moved away from incomes and rents, and the report also offers context that short news items usually leave out.
The index assesses how far housing prices have moved away from economic fundamentals. It compares them against two yardsticks: residents' incomes, meaning the wages from which people buy homes and repay mortgages, and rents, meaning the income a flat would bring if let out. Over the long term, prices should move roughly in line with both. If they grow significantly faster for a prolonged period, housing becomes less affordable and buyers rely more on further price gains. According to UBS, a widening gap between prices and rents has in the past been one of the first warning signs of later price corrections. A correction means a noticeable fall in prices after a period of growth, bringing prices closer to a level consistent with incomes and rents.
The score also takes into account whether credit and construction in the country are growing disproportionately fast, and how prices in the city are developing compared with the rest of the country.
UBS also points out that a "bubble" is a substantial and sustained mispricing of an asset. Put simply, the price drifts away from the real value of the property, but this can only be confirmed with certainty in hindsight, once prices fall sharply. The index therefore does not predict whether or when a price correction will occur. It is a signal to pay closer attention, not a forecast. Cities are placed into four bands:
Score | Risk band |
|---|---|
below 0.5 | low |
0.5 to 1.0 | moderate |
1.0 to 1.5 | elevated |
above 1.5 | high |
Dubai ranks fourth out of 23 cities. Miami, Seoul, Geneva and Lisbon are also in the elevated risk band, while only Zurich and Tokyo are in the high risk band. Dubai is 0.16 points above the lower boundary of the elevated band and 0.34 points below the high risk threshold. The score rose slightly year on year (last year it was 1.09), but UBS also notes that risk in Dubai has eased since March.
Rank | City | Score | Band |
|---|---|---|---|
1 | Zurich | 1.69 | high |
2 | Tokyo | 1.54 | high |
3 | Miami | 1.41 | elevated |
4 | Dubai | 1.16 | elevated |
5 | Seoul | 1.13 | elevated |
6 | Geneva | 1.12 | elevated |
7 | Lisbon | 1.04 | elevated |
16 | Hong Kong | 0.61 | moderate |
19 | Paris | 0.33 | low |
20 | London | 0.32 | low |
21 | New York | 0.28 | low |
Source: UBS Global Real Estate Bubble Index 2026, selection of cities.
In 2025, prices in Dubai rose by more than 10% after adjusting for inflation (in real terms). With the onset of the conflict involving Iran, that growth stopped. Real prices are back at mid-2025 levels and real rents are below last year's level. UBS describes this development as "hard braking".
Indicator (Dubai) | Value |
|---|---|
Real price change in the year to Q2 2026 | +0.4% |
Real rent change over the same period | decline of 4.0% |
Average real price growth over the past 10 years | 2.2% per year |
Across all 23 cities, prices rose by an average of 0.5% in real terms over the past year, so Dubai is roughly in line with the average.
Dubai's score is made up of several components, and each came out differently:
Price development over time (high band). Dubai has seen several years of strong price growth, and this feeds into the score the most.
Prices relative to incomes and rents (elevated band). Prices are higher than these fundamentals would suggest, but not to the greatest extent.
Credit (low band). Mortgage lending in the country is not growing disproportionately fast.
Construction (moderate band). Construction is within a normal range.
Put simply, the higher score mainly reflects the fact that prices have risen quickly in recent years, not that people have been borrowing excessively.
The report uses three yardsticks that are often confused in simplified summaries.
1. Price-to-income ratio. UBS calculates how many years a skilled service worker would need to work to buy a 60 sq m flat near the city centre.
City | Years of average income |
|---|---|
Hong Kong | 15 |
London | 11 |
Dubai | 5 |
Dubai is among the cities with the lowest ratio. UBS, however, points out two things. The data for this comparison underwent a comprehensive revision this year, meaning it was adjusted and updated, so this year's figures cannot be compared with values from previous years. The figure is also based on the income of a specific group of residents, skilled service workers, and does not say whether everyone could afford such a flat.
2. Price-to-rent ratio. According to UBS, the value in Dubai is low for several reasons. The rental market is less regulated, so owners have more freedom in setting rents. Interest rates are higher, which raises the cost of financing a purchase. And investors demand a higher return as compensation for uncertainty, the so-called risk premium, which is why they are not willing to pay as many multiples of annual rent for a flat as, for example, in Zurich. Roughly speaking, 16 years corresponds to a gross yield of around 6% per year on the price of the flat. This is a gross yield, meaning it assumes the flat is let for the whole year, and is before fees and other costs.
3. User cost. This indicator answers the question of whether, financially, it is more advantageous for a person to own a flat or to rent. UBS calculates the annual cost of ownership, meaning mortgage interest, maintenance, taxes, depreciation and the return the owner forgoes by not having the money invested elsewhere. To this it adds a premium for uncertainty over price development and deducts the expected appreciation of the flat. The result is compared with the annual rent for the same flat. Dubai, together with Madrid and Zurich, is among the cities where owning comes out cheaper than renting, and is therefore relatively attractive compared with renting. However, this result rests on the assumption that prices will rise. Direct ownership costs on their own are higher than rent in all cities, including Dubai, and UBS states that in almost all cities the financial case for buying depends on future property appreciation.
The report identifies three areas worth monitoring:
Premium segment. Uncertainty about whether the inflow of high-income individuals will resume weighs on the most expensive properties.
Supply. Some projects are stalled or delayed, and concerns about supply exceeding demand persist, which may cause price fluctuations.
Geopolitics. Further developments depend mainly on the situation in the region.
UBS also states that Dubai's structural advantages, namely its strategic location and its role as an international business hub, remain intact. An improvement in the geopolitical situation would, in its view, likely support market sentiment and price expectations quickly. According to the report, existing tenants are also likely to take advantage of the pause in price growth and possible discounts to buy their own home.
Housing demand is increasingly driven by people with accumulated wealth, meaning savings and investment returns, for example from shares. They can make a larger down payment or buy a property in cash, so mortgage rates affect them less. As a result, prices of prime properties in many cities are developing better than prices of flats in the rest of the market, where buyers rely mainly on earnings and mortgages. Overheating is also becoming more localised, and prime districts can differ significantly from the citywide average. In cities with elevated and high risk, which include Dubai, real prices over the past five years rose by almost 30% on average, rents by 15% and incomes by only 8%. Markets classified as high risk in 2021 subsequently saw the sharpest price declines, averaging roughly 3% per year. This does not mean Dubai will follow a similar path. It does, however, show why UBS monitors whether prices are drifting further away from incomes and rents.
It is useful to assess the direction of a few specific indicators rather than individual values.
Indicator | Favourable signal | Signal for caution |
|---|---|---|
Real prices and rents | prices stabilise and rent growth returns | prices rise while rents keep falling |
Inflow of high-income individuals | inflow resumes | prolonged uncertainty in the premium segment |
Supply and project completions | completions on planned schedules | stalled and delayed projects |
Geopolitical situation in the region | improvement, which according to UBS would quickly support expectations | continued tension |
Score in the next edition of the index | decline towards the 1.0 threshold | rise towards the 1.5 threshold |
The score is an average for the whole city, while UBS itself notes that markets and segments can differ significantly from the average. For an investor, three practical conclusions follow.
The price pause opens room for negotiation. It is sensible to compare the terms of several projects and ask about payment plans and possible discounts.
The project matters more than the city average. When choosing, it is worth assessing documented demand in the location, the developer's track record and a realistic completion date, in other words the factors related to the supply risks UBS mentions.
Rental yield should be calculated conservatively. The price of a flat in Dubai corresponds to roughly 16 years of rent, which is a low value compared with most cities, but real rents fell by 4.0% over the past year. The calculation should also allow for periods without a tenant and management fees.
If you are considering buying property in Dubai and would like to assess a specific project against these criteria, we are here for you.
The information in this article is based on the UBS Global Real Estate Bubble Index 2026 report (UBS Chief Investment Office GWM, data as of 26 August 2026).
