As Dubai’s frothy property market continues shining, investors keep lining up to target potential in the glittering Gulf city: On Oct. 8, Bloomberg reported that Dubai Holding, the investment conglomerate owned by the emirate’s ruler, is considering creating a real estate investment trust to capitalize on the property boom.

This comes as Dubai’s property sector set a new record in Q3 2024 with 50,425 transactions, the highest number ever recorded and a 38% increase year-on-year, according to DXB Interact. Home values in the city have now risen for 16 consecutive quarters. Still, these developments exist alongside potential hazards for a market that is no stranger to boom and bust cycles.

According to the UBS Global Real Estate Bubble Index 2024, released on Sept. 24, the risk of a housing market bubble in Dubai grew faster over the past four quarters than in any other major city. Dubai’s housing prices rose by nearly 17% in the past four quarters — leading all other cities studied — and rents increased 60% in real terms.

Despite this, Dubai’s bubble risk still remains in moderate territory, noted UBS, and the index was topped by Miami and Tokyo. Dubai’s risk score ranked 14th out of the 25 major cities analyzed by UBS, just behind Tel Aviv at 13th.