Dubai's real estate market is gearing up for a slowdown - the end is nigh for hot lighters.

More than nine months after buying their first property in Dubai, Dina Habib and Karim Yusuf are already planning their next move in the city. An Egyptian couple who have been renting in the Emirates for eight years are selling their one-bedroom apartment in the Jumeirah Village Circle neighborhood on the outskirts of Dubai for a 26% premium over the AED1.7 million ($460,000) they paid for the property in March. Khabib hopes to purchase a larger home for his three-member family at the same price or cheaper. "We spent years paying other people's mortgages because we were afraid to buy in a market that was constantly fluctuating," says the 39-year-old researcher. "We now think the market may have peaked, so we are planning to sell and buy a garden home next year, when hopefully prices will come down a bit." Habib and Yusuf are among hundreds of thousands of homeowners trying to find their place in Dubai's hot real estate market, which has outperformed most others around the world this year. They join tenants, real estate analysts and developers in an attempt to predict whether the market is finally starting to turn around as more new developments come on stream and global economic uncertainty piles up on the emirate.

The market's rise so far has been fueled by a flood of wealthy investors

such as Russians looking to protect their assets, cryptocurrency millionaires and wealthy Indians looking for a second home. The government's fair assessment of the pandemic and its free visa policy has also attracted more foreign buyers.

Since the beginning of January 2020, rents in the Emirates have risen by about 42%

a home prices jumped about 33%, according to real estateagency CBRE Group Inc. Villa rental prices have risen the most dramatically and now average $88,400 per year.

The rise has encouraged many renters

such as Habib, decide to buy properties to avoid repeated rent increases or eviction from the city. After her landlord increased the rent on her two-bedroom property by 16% over three years, Habib bought the apartment, which she is now trying to sell.

The Dubai real estate market has long been known for its sharp ups and downs

One of the most notable downturns was the crash in 2009, after several years of growth on debt funds. This collapse put the biggest builders on the verge of collapse. Prices recovered in 2011 and then fell again in 2014 after the collapse in oil prices impacted the region's economies. Since then, the government has introduced a number of reforms for buyers and developers to mitigate volatility, including raising down payment requirements for mortgages to 20%.

Still selling a property "in the hope of buying the same property next year at a lower price is a risky bet "

At the same time, the number of real estate transactions in November was down 13% year-on-year.

mainly due to a decline in pre-contract sales, as new projects sold out quickly and the stock of real estate was exhausted. However, sales of existing homes rose 5.1 percent that month.

Pratusha Gurrapu, head of research and consulting at real estate firm Cushman & Wakefield Core

also expects prices to rise moderately but not fall next year. She believes population growth will support the market, and "if the Federal Reserve lowers interest rates, it will stimulate mortgage buyers." Mortgages now account for only about a quarter of all real estate transactions in Dubai, according to Morgan Stanley data.

Last month, S&P said it expects house prices to rise 5% -7% next year

and then decline by 5% to 10% over the next 12 to 18 months as global economic uncertainty and an increased supply of new homes weigh on the market.

"At the moment there are no big signs that the cycle has already started to turn, but we know that buyers are reducing their requirements a little bit, so the average size of home is shrinking. "

- said Tatiana Leskova, senior analyst at S&P Corporation. "Much of the market is approaching a certain limit in terms of purchasing power. "

After a record year in sales and new project launches, real estate developers are also beginning to adapt

S&P expects around 40,000 properties to be delivered in Dubai next year and the same number in 2025. This is much more than in previous years when between 15,000 and 30,000 homes were built. As a result, Morgan Stanley expects developers' focus to shift to profit growth as such large debts are executed, although construction companies typically deliver fewer properties than expected.

The results of Dubai's boom and bust cycles are unsettling for Mohammed Alabbar

founder of Emaar Properties PJSC, which built the world's tallest building and holds about 30% of Dubai's real estate market. Emaar Development, the construction arm, increased its home-market real estate sales orders for the year by 60% to Dh59.6 billion as of Sept. 30.

Emaar, setting its record last year in revenue, is using the city's booming economic development as an opportunity to manage its finances.

but Alabbar remains cautious. Project execution and the state of financial health of contractors are his biggest concerns.

Mohammed Sajwani, founder of Damac Properties PJSC

one of Dubai's largest private developers, believes that the Emirati real estate market is not yet overheated and expects price growth to stabilize. However, the billionaire also finds it difficult to predict what might happen next year.

Prices could fluctuate "about 10 percent up or down "

-he said in an interview with Bloomberg TV earlier this month.