'Dubai is a super bubble': Investor warns real estate frenzy surpasses Gurugram

Investor and entrepreneur Rajesh Sawhney has sounded an alarm over surging real estate prices in Dubai, describing the emirate's property market as a "super bubble" that dwarfs even the speculative rise seen in Indian cities like Gurugram.

In a post titled 'Dubai: Real Estate Super Bubble', Sawhney said he spent some time with his cousin had been a savvy investor in Dubai real estate. "He advised me, 'Never invest in anything beyond 100 kms of where you live.' It reminded me of my first meeting with Mike Moritz of Sequoia Capital in 2002 at their Sandhill Road office. He said Sequoia doesn't need to invest in any startup beyond Bay Area. The farthest they would invest is San Francisco."

"This year, I have felt Real Estate in Gurugram was bubbly. But here in Dubai, I feel if Gurugram is a bubble, then surely, Dubai is a Super Bubble," the entrepreneur added.

There have been warnings from global institutions about overheating in Dubai's property market. The UBS Global Real Estate Bubble Index 2025, released last month, placed Dubai fifth globally in terms of bubble risk — with prices rising 50% in five years and double-digit gains since mid-2023.

In its report, UBS stated that since mid-2023, real prices have climbed by double digits and are now 50% 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. Incomes are not keeping pace with home prices as Dubai's population has grown by nearly 15% since 2020, with an immigration boom tightening the housing supply."

The report added that construction activity was approaching 2017 levels, while competition for foreign real estate investment between Dubai, Abu Dhabi, and Riyadh was intensifying. UBS noted that while Dubai’s fundamentals - including population growth and regulation — remain strong, "bubble risk has become elevated."

Credit rating agency Fitch Ratings also warned in May that Dubai property prices would face a "moderate correction" between late 2025 and 2026 after peaking this year, though it said the decline would likely not exceed 15%, with banks and homebuilders expected to withstand the adjustment.

In India, concerns have also been rising about overheated urban housing markets. Real estate analyst Vishal Bhargava recently likened Gurugram's property boom to a "house of cards", warning of speculative excesses. He said the surge in home prices since 2021 had been driven less by real demand and more by what he termed 'dangerous speculation'.

Hedge fund manager Akshat Shrivastava argued that buying property in Indian metros could be a costly mistake, citing overdevelopment, inflated pricing, and infrastructure stress. "Buying a property in an Indian Metro is going to be one of your worst mistakes. Entire market is builder controlled (so you buy very expensive). Overdevelopment is causing infrastructure issues (so the cities are becoming unlivable)," he wrote last month.