According to the Global Real Estate Bubble Index for 2023 published by UBS, the Dubai property market remains reasonably valued and its house price gains will remain strong in the coming quarters.

The investment bank said real house prices in the emirate continue to rise at a double-digit rate.

We believe the market is fairly valued given strong income growth and a red-hot rental market where rental growth is even outpacing owner-occupier price growth, the bank said.

Although Dubai is highly cyclical and prone to overdevelopment, price momentum should remain strong in the coming quarters.

The bank said Dubai is one of nine cities out of 25 globally surveyed by UBS where house prices are reasonably valued.

Only Zurich and Tokyo are at risk of a house price bubble, while the remaining 14 cities are considered overvalued by UBS.

San Francisco, New York, Boston, Sao Paulo, Madrid, Milan, Warsaw and Singapore are the other cities where house prices are "reasonably valued", according to the bank.

Real house prices in the cities surveyed fell by an average of 5 per cent from mid-2022 to mid-2023, and there could be more downside for house prices, UBS said.

The bank said soaring global inflation over the past two years has led to a sharp average decline in imbalances in housing markets in financial centres around the world.

Claudio Saputelli, head of real estate at UBS Global Wealth Management's chief investment office, says: Adjusted for inflation, house prices are actually 5 per cent lower now than they were in mid-2022.

On average, these cities have lost most of the real price gains achieved during the pandemic and are now close to mid-2020 levels again.