Q1 2026 Market Outlook

Q1 2026 Market Outlook

The team believes Dubai’s Real estate market is in for a broadly stable 2026. Growth will slow down compared to the 2022-2024 boom. The market appears to be in a consolidation phase particularly in historically low inventory areas. Demand will continue to outstrip supply across most parts of the market as population influxes continue and foreign investment remains a key driver for off plan sales. 

This sentiment is particularly strong for Detached Villas as an asset class, future supply is far behind current demand levels, thus this asset class appears to be in for another strong year. We expect to see this asset class outperform the market providing alpha returns for investors. Expected growth is between 6% - 8%+ for the 2026 calendar year. 

Price sensitive apartments particularly in more volatile areas with high inventory may see supply side pressure. This is most notable in Business Bay, JVC and Downtown Dubai particularly in the mid market segments that fall within these areas. However, with rental yields continuing to rise it is likely that that strong investor demand will keep the market liquid and transactions high.  We view this as potentially the softest area within the market currently. We expect these areas to fall by between -3 - -5% and for time to sale (TTS) to increase. 

Strong Points from 2025 data

• Off Plan Sales Continue to dominate transactions

• 149,230 first sales worth AED448.1 billion, up 33.6 per cent on 2024.

• Secondary market sales growth

• 66,400 resale transactions valued at AED238.8 billion, up 26.2 per cent on 2024.

• Luxury detached villas continue to appreciate 

• Emirates Hills saw a record breaking sale (AED 425 Million). 

• Rental growth is stabilizing (5% - 8%) keeping units affordable for middle market consumers. 

Areas for Concern

• Supply side shock

• More than 150,000 new apartments and villas are predicted to be delivered between 2026 & 2027.

• Price appreciation cooling

• Our analytics team has seen the majority of neighborhoods have notable flat if not slightly negative real estate appreciation/depreciation.

In conclusion, we see 2026 as a year for consolidating portfolios. The advice we give to investors when looking at apartments is to search for distressed deals in low inventory apartment complexes where the asset is rent rolling. 

In terms of Villas, the investor should focus on branded communities as central as possible with a distinct priority for detached villas. Dubai South is promising however it is financially prudent to wait for the surrounding infrastructure to be delivered.