How much of your wealth should be in property?

Between late February and June this year, Dubai residential values fell by around 10%, according to ValuStrat, as regional disruption hit buyer confidence.¹ By June the index was roughly back to where it had been a year earlier, and the monthly falls had slowed.

For most people it was a headline. For an expat whose salary, savings and home all sit in the same city, it landed a bit closer.

In part 1 I looked at whether property can give you passive income in retirement. This one steps back to a simpler question: how much of everything you own is actually property?

How do you work out how much of your wealth is in property?

Add up what you'd have left if you sold everything and cleared every debt, then see how much of that comes from property.

For property, use your equity: what it's worth minus any mortgage. Include your own home, anything you let out and anything off-plan you've already paid into. Then list pensions, investments and cash alongside it.

Here's a simple, hypothetical example of the kind of picture that's common among British expats in the Gulf.

Nearly 80% of this person's wealth is in two buildings.

Nobody sets out to build it like that. It happens one sensible-looking decision at a time: keep the UK house when you move, buy instead of rent in Dubai, and let everything else take a back seat.

Why does it matter if most of your wealth is in property?

Because property markets do fall, and when most of your wealth is in one or two of them, a fall hits almost everything you own at once.

And not all property markets move the same way. For expats in the Gulf, the one that matters most is often Dubai, and Dubai has historically moved much further, in both directions, than the UK.

Why is Dubai property more volatile than UK property?

Because it's a younger, faster-moving market, with the kind of swings that tend to come with emerging markets.

The UAE is classed as an emerging market by index provider MSCI, which upgraded it from frontier status in 2014.² That label applies to its stock market rather than its property, but the property market shares many of the same traits. Foreigners have only been able to buy freehold property in Dubai since 2002.³ Transparency has improved fast: JLL's 2024 Global Real Estate Transparency Index placed Dubai in its "Transparent" tier, 28th in the world and the highest in the Middle East and North Africa.⁴ That's still a tier below the most mature markets, such as the UK.

You can see the difference in how prices have moved.

A few things tend to drive those bigger swings:

• Demand depends on people arriving. Dubai's population has grown from around one million in the early 2000s to more than four million.⁸ When jobs and confidence are strong, that growth fuels prices. When they wobble, demand can cool quickly.
• Most sales are off-plan. Around three in four residential sales in the second quarter of 2026 were off-plan, 27,113 out of 35,465.¹ Many off-plan buyers are investors planning to sell on, so sentiment matters more than in a market made up mostly of people buying homes to live in.
• Supply can arrive fast. More than 350,000 homes are registered for delivery between 2026 and 2030, nearly double Dubai's historical average.⁹
• Sensitivity to the wider world. Oil prices, global money flows and regional events all feed through quickly, as this year showed.

Volatility cuts both ways. The same market that lost more than half its value after 2008 has more than doubled since 2021, and plenty of people have done very well from it. Higher volatility isn't the same as a bad investment.

What it does change is how much the size of your holding matters. The bigger a market's swings, the more one apartment can move your whole net worth, in a good year or a bad one.

None of this is a forecast. But "property always goes up" describes the long run, and people don't always get to choose when they need their money.

How does a mortgage change the picture?

A mortgage magnifies the effect of a price fall on your equity. The bank's share stays the same, so the whole fall comes out of yours.

Here's what a 20% fall in both markets would do to the example above. It's a stress test, not a prediction.

The UK house only fell 20%, but the equity in it fell 30%. A £90,000 drop in the house price came entirely out of the owner's share.

I've held the other investments flat to keep the example simple. In practice they move too, but usually not in lockstep with two specific property markets.

Does owning property in the UK and Dubai count as diversification?

Partly. It spreads some risk, but less than it feels like it does.

There are real differences between the two. Two separate markets, two legal systems, and two currencies: the dirham is pegged to the US dollar, while UK property is priced in sterling.

But both are still property. Both are illiquid, both cost a lot to buy and sell, and both are often mortgaged. In a broad downturn, they can fall together.

Why your job and your property may be the same bet

This is the part that's specific to living abroad, and I think it's the easiest to miss.

If you work in Dubai and own property in Dubai, both depend on the same economy. A slowdown that puts pressure on property prices can also put pressure on jobs, bonuses and visas.

So the moment you'd most want to sell something, or lean on your savings, could be the same moment the apartment is worth less and harder to sell. Most of your financial life would be riding on one city.

How easy is it to rebalance out of property?

Not very. Property is bought and sold whole, with costs on both sides.

• Buying in Dubai. The Dubai Land Department transfer fee is 4% of the price, and with agent commission and registration fees, total buying costs typically run at 7% to 10%.¹⁰
• Buying in the UK from abroad. Non-UK residents buying an additional home in England pay a 2% surcharge on top of the 5% higher rates for additional dwellings. On a £400,000 purchase, Stamp Duty Land Tax comes to £38,000, against £10,000 at standard rates.¹¹
• Selling. Agent fees, legal costs and, in the UK, potentially tax on any gain, plus however long the sale takes.

With shares or funds, you can sell a slice when you need it. With property, it's all or nothing, on the market's timetable.

So how much property is too much?

There's no rule that fits everyone. Someone with a large final salary pension can carry far more property than someone whose only other asset is a small savings account. It depends on your income, your plans, your age and how you'd feel if one market fell sharply.

Rather than a number, a few questions tend to be more useful:

• If you needed cash for an emergency, could you get it without selling a property?
• Where will your retirement income come from, outside of rent?
• Could you cope if a property market fell 20% in the same year you lost your job?
• Are you adding more property because it fits the plan, or because it's what you know?

None of this means property is a bad thing to own. For many people it's been the best financial decision they ever made. The point is to know how much of your future is resting on it, and to make that a choice rather than something that happened by default.

Common questions

What is concentration risk in property?

It's the risk that comes from having a large share of your wealth in one type of asset, one market or one building. If that market falls, or the property needs selling in a hurry, a big part of your net worth is affected at once. With a mortgage, the effect on your equity is larger than the fall in the property's price.

Is owning property in both the UK and Dubai diversified?

Partly. Two markets and two currencies spread some risk, since the dirham is pegged to the US dollar and UK property is priced in sterling. But both are still property: illiquid, expensive to buy and sell, and often mortgaged. And a Dubai property depends on the same economy as a Dubai salary, so both can come under pressure at the same time.

Why is Dubai property more volatile than UK property?

Dubai is a younger, faster-moving market. Foreigners have only been able to buy freehold property there since 2002, demand depends heavily on people moving to the city, most sales are off-plan, and new supply can arrive quickly. Its price swings have been much larger than the UK's: Dubai property lost more than half its value between 2008 and 2011 and has more than doubled since January 2021, while UK house prices fell about 19% between 2007 and 2009.

Is Dubai an emerging market?

The UAE is classed as an emerging market by index provider MSCI, which upgraded it from frontier status in 2014. That classification applies to its stock market, but Dubai's property market shares many emerging market traits, including bigger price swings and a shorter track record than mature markets like the UK.

Should you count your home when working out how much of your wealth is in property?

It's worth including, because it's part of your wealth and moves with the property market. But you can't easily turn it into cash without moving, so some people find it useful to look at the figure both with and without their main home.

How much stamp duty does a non-UK resident pay on a second property in England?

Non-UK residents buying an additional home in England or Northern Ireland pay a 2% non-resident surcharge on top of the 5% higher rates for additional dwellings. On a £400,000 purchase that comes to £38,000, compared with £10,000 at standard rates.

Sources

1. ValuStrat, Dubai real estate review Q2 2026, via Zawya.
2. Gulf News, UAE, Qatar get emerging market status.
3. Sotheby's International Realty, A guide to freehold properties in Dubai.
4. Dubai Land Department, JLL 2024 Global Real Estate Transparency Index.
5. Nationwide house price index, as reported by Mortgage Solutions. The peak to trough figure is calculated from Nationwide's published changes.
6. CNBC, Why Dubai property malaise is different this time.
7. ValuStrat, as reported by EFG Hermes One. Values 29.3% below the mid 2014 peak in Q2 2019.
8. Engel & Völkers, Dubai real estate market through time.
9. EnterpriseAM, Is the Dubai property correction finally here?
10. Property Finder, DLD fees in Dubai.
11. GoFile, SDLT non-resident surcharge. See also HMRC, residential property rates.