Dubai’s residential property market is set to enter 2026 from a position of broad demand, strong liquidity, and structural resilience, supported by economic growth, population expansion, and stable pricing, according to market data and analysis from betterhomes.
2026 market outlook
The city’s property sector enters the new year with strong structural fundamentals. UAE real GDP grew 3.9% in Q1 and 4.5% in Q2 of 2025, with growth expected to exceed 5% in 2026.
Inflation remained low at 1.3%, and Dubai’s population rose 5.4% year-on-year to 4 million, while 17.5 million overnight visitors were recorded from January to November.
Louis Harding, CEO of betterhomes, said: “What defines 2025 is the quality of growth rather than just the pace. Economic expansion, low inflation and population growth are reinforcing each other, creating a more durable foundation for real estate activity.”
Record sales in 2025
Dubai recorded its strongest residential year on record in 2025, with total sales value reaching Dhs 547 billion, a 28% increase year-on-year, across 203,000 transactions, up 20% from 2024. Studios and one- to two-bedroom apartments dominated, making up 77% of transactions, while 72% of deals fell within Dhs 500,000–Dhs 3 million, reflecting strong market depth.
Off-plan developments led the market, accounting for 65% of transactions and 53% of total value. Apartment sales reached Dhs 325 billion, up 29% year-on-year, while villas and townhouses contributed Dhs 221 billion, up 26%. Average sale prices rose 12% to Dhs 1,673 per sq ft, showing the market’s ability to absorb new supply without price erosion.
Harding added: “This was not a narrow or speculative cycle. Liquidity was broad, repeatable and focused on segments where both end-users and investors continue to transact with confidence.”
Leasing activity rises
Leasing also accelerated sharply in 2025, with betterhomes reporting a more than 60% increase in transactions. Average annual rents held steady at Dhs 207,000, supported by strong family-led demand.
Rupert Simmonds, Director of Leasing at betterhomes, said: “Leasing momentum in 2025 came from people moving forward, not prices running ahead. Stable rents alongside higher transaction volumes reflect a market driven by families and long-term tenants making deliberate housing decisions.”
Buyers and investors
Buyer demand grew 33% year-on-year, with mortgages accounting for 52% of purchases, overtaking cash. Investors remained the majority at 57% of purchases. India and the UK were the top foreign nationalities. Dubai’s luxury segment expanded further, with average prime property prices rising 26% to Dhs 30 million.
The 2025 performance highlights a residential market supported by economic fundamentals rather than speculative activity. Strong sales, steady pricing, high liquidity, and growing population suggest the market is well-positioned to maintain momentum through 2026.
tanvir@dubainewsweek.com
