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Dubai residential real estate shows resilience amid quieter market
Prices and rents are holding steady even as deal volumes ease, with new reports pointing to a maturing Dubai property market that is proving sturdier than past cycles
- PUBLISHED: Wed 29 Jul 2026, 6:01 AM
Dubai’s residential property market is showing notable staying power, with pricing resilience the standout theme in two new reports from UBP and CBRE, even as transaction activity cools from the record highs seen at the end of 2025.
Transaction values in Dubai eased 55 per cent between December 2025 and May 2026, with delivered-property deals down 49 per cent and off-plan sales down 58 per cent, UBP’s real estate team found. The Dubai International Financial Centre (DIFC), home to a smaller pool of premium properties, saw a steeper 67 per cent pullback over the same period. Encouragingly, June brought a modest rebound, a sign that momentum may be starting to steady.
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CBRE’s second-quarter market review adds further texture: residential transaction volumes across Dubai were 29 per cent lower year-on-year in Q2 2026, with just under 37,000 sales versus more than 51,000 a year earlier. Total transaction values came in at Dh88 billion, versus nearly Dh154 billion in Q2 2025 — a moderation from an exceptionally strong prior-year base.
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The real story is how well pricing has held up. UBP data shows Dubai’s price per square metre is down just 10 per cent year-to-date, with delivered units barely moving (off just 2.4 per cent) while off-plan properties absorbed most of the adjustment (down 10.8 per cent). The DIFC, more exposed given its smaller, concentrated stock, saw a 17.8 per cent year-to-date decline. CBRE’s figures are even more upbeat, showing residential sales prices still 1.9 per cent higher year-on-year — genuine growth despite the quieter backdrop.
The rental market has stayed largely calm too. Rents for new contracts across Dubai have eased 4.8 per cent since peaking in February 2026, while renewal contracts — protected by rules capping increases for tenants near the market average — have actually risen 3.1 per cent, with existing tenants seeing no negative impact. The DIFC, which lacks Dubai-wide rent-increase regulations, saw a larger 16.4 per cent dip since February. CBRE’s broader Q2 snapshot shows average Dubai rents 2.6 per cent lower annually and 6.2 per cent down quarter-on-quarter, a gentle easing after years of rapid gains.
Both reports trace the shift to the same catalyst: the US-Iran war, which interrupted a market that had been hitting record highs through the end of 2025. With expatriates making up roughly 90 per cent of Dubai’s population, analysts will be watching how the community settles in over the coming months. UBP’s authors, Fahd Iqbal and Pierre Escande, note that “the full impact of the conflict will be better ascertained after the summer,” once the new school year offers a clearer read on demand.
“The resilience in pricing is more encouraging, pointing to an increasingly mature real estate market supported by an economy with greater breadth and depth than in previous years,” they added.
Supply remains a factor to watch, though the picture looks manageable. Roughly 350,000 residential units are projected for delivery by 2030, though UBP points out that historically “at most half” of such pipelines arrive on schedule, easing near-term pressure. CBRE recorded about 18,000 units completed in the first half of 2026, comfortably absorbed so far.
Fahd Iqbal, UBP’s Head of Investment Services in Dubai, said: “What stands out is the resilience the Dubai residential market has shown so far. The data suggests the market is normalising after an exceptional period of growth, pointing to a more mature market than in previous cycles. While downside risks still clearly remain, we would expect the impact to be more differentiated by location than before.”
Abu Dhabi, meanwhile, continues to shine. CBRE found residential values there up 21.6 per cent year-on-year in Q2, powered by 24.4 per cent apartment price growth, alongside rents still climbing 3.6 per cent annually. Transaction values reached Dh32 billion, a 150 per cent jump from Q2 2025, with off-plan sales accounting for 83 per cent of all deals — underscoring investor confidence across the wider UAE.
“The second quarter marked a notable shift in the UAE’s economic and real estate landscape, as regional geopolitical developments began to weigh on business activity, tourism flows and broader market sentiment. Although near-term conditions are likely to remain challenging, the country’s long-term growth trajectory remains supported by structural reforms, strategic investment and its position as a leading hub for trade, capital and talent,” said Matthew Green, Head of Research at CBRE Mena.
For Dubai’s residential market specifically, both reports converge on an encouraging verdict: the softer activity so far reflects measured buyer caution rather than any structural downturn, with pricing resilience pointing to a market that has matured well beyond previous boom-bust cycles — a strong foundation as conditions normalize ahead.
Associate Editor Somshankar Bandyopadhyay brings more than three decades of experience to the KT newsroom. Currently, he manages the news production of the business section, ensuring that the top economic and business news of the day reaches its readers.