There is a "prospect of oversupply if current delivery plans are met, and the risk of being unable to stimulate demand in view of massive development projects in the pipeline," wrote Bashar Al Natoor, director in Fitch's Corporate team, in an e-mailed statement.

The U.A.E. is the largest construction market in the Gulf Cooperation Council, which forecasts $2 trillion worth of projects by the end of the first quarter, according to the Middle East Economic Digest. Dubai, the second-largest U.A.E. sheikhdom, became the first place in the Gulf to allow foreigners to own property in 2002, sparking the current real estate boom.

There is a "high probability" of late delivery, and even project cancellation, because of shortages of labor and building materials, which would mean a better match between supply and demand, Al Natoor said.

Source: Bloomberg