The Perfect Storm: How Population Growth and Supply Gaps Are Set to Drive Dubai Property Prices

 The market signals aren't subtle. Population climbs, supply shrinks, infrastructure lags fifteen years behind At Zavora Group, we've been analyzing these dynamics to understand where the market moves next.

We've tracked these three trends independently for years. Watching them converge creates a different picture than analyzing each in isolation.

The Supply Gap Keeps Widening

The numbers tell a clear story. The U.S. housing supply deficit reached 3.8 million units as of Q4 2020, jumping 52% from 2.5 million just two years earlier.

Entry-level housing took the biggest hit. Annual construction of new entry-level homes dropped from 418,000 units in the late 1970s to just 65,000 units in 2020.

That's less than one-fifth of what we built four decades ago.

The gap between household formation and construction widens each year. Projections show 860,000 new households forming annually through 2035, but construction rates remain suppressed by labor shortages, land-use regulations, and raw material costs.

Population Demand Compounds the Problem

Demographic pressure doesn't pause for supply constraints. Household formation projections indicate 8.6 million new households between 2025 and 2035.

Delayed household formation among millennials and Gen Z created pent-up demand. At least 1.6 million expected households didn't form in 2024 because affordable housing wasn't available.

These aren't households that disappeared. They're compressed demand waiting for supply to catch up.

Infrastructure Timelines Lock In Constraints

Infrastructure development operates on a different clock than market demand. Major pipeline projects take 5-18 months just for regulatory review, with an average of 15 months.

Broader infrastructure supporting housing development extends these timelines further. Zoning changes, utility expansion, and transportation access layer additional years onto development schedules.

The result? Supply relief isn't coming quickly.

Price Pressure Becomes Sustained

These forces don't operate in isolation. They compound. Median existing-home prices reached $435,300 in June 2025, marking 24 consecutive months of year-over-year increases.

The primary driver remains supply shortage against demographic demand. With infrastructure timelines extending years into the future, the pressure sustains rather than resolves.

Construction barriers, regulatory delays, and demographic momentum create a market environment where supply can't respond quickly to demand signals. Price predictions through 2030 show continued appreciation at or above inflation rates.

The convergence of these three forces creates sustained upward pressure. Population growth drives demand, supply constraints limit inventory, and infrastructure timelines prevent rapid correction.

Markets eventually find equilibrium. The question becomes how long that takes when the third force operates on a 15-year timelin At Zavora Group, we help clients navigate these market realities with data-driven insights into property investment opportunities.