Near-Record Demand Meets a Rising Supply Wave
Dubai recorded AED 286.43 billion in property sales in the first half of 2026, the second-highest first half in the emirate’s history, behind only the AED 326.6 billion recorded in H1 2025. The first quarter set the pace, with total real estate transactions reaching AED 252 billion, up 31% year on year.
Activity eased in the second quarter as buyers grew more cautious amid regional uncertainty, then rebounded in June with 13,766 sales worth AED 32.66 billion, a 31.3% jump in volume over May. The buyer mix has also shifted. Ready properties accounted for AED 146.69 billion of first-half sales across 27,160 transactions, ahead of off-plan sales at AED 139.75 billion across 58,840 transactions.
On the supply side, Dubai completed 104 projects worth AED 111 billion in the first half of the year, adding 24,537 new homes, more than 36% above the same period in 2025. Dubai Land Department data shows 96,585 homes due for handover across 2026, and 82.9% of them have already been sold.
Prices are still rising, but at a steadier pace. Cavendish Maxwell put the average price at AED 1,639 per square foot in June 2026, up 1.9% year on year, with residential rents averaging AED 75.7 per square foot, up 7.8%. Quarter to quarter, the picture is softer. CBRE data for Q2 2026 found average residential rents fell 6.2% from the previous quarter, as new supply gives tenants more choice in apartment-heavy communities, while villas and prime waterfront areas remain firm.
Sub-Market Spotlight on Dubai South
In June 2026, Madinat Al Mataar led Dubai on both volume and value, recording 2,577 sales worth AED 2.76 billion. Its rise reflects growing activity around Dubai South and the Al Maktoum International Airport corridor, where a major airport expansion is drawing buyers to the emirate’s next growth area. Business Bay ranked second by value at AED 2.22 billion, supported by continued demand for premium apartments and branded residences.
Strong Economic Fundamentals Propel Market Confidence
The UAE economy continues to provide a solid base for the property market. Real GDP grew 6.2% in 2025, while non-oil GDP grew faster at 6.8%, with real estate itself expanding 7.9%. The Central Bank of the UAE forecasts GDP growth of 5.6% in 2026, driven mainly by non-oil sectors.
Government programs are also widening the buyer base. Dubai’s First-Time Home Buyer Program has helped more than 3,200 residents buy their first homes by June 2026, generating over AED 5 billion in transactions since its July 2025 launch.
Momentum in Construction and Project Development
The UAE projects market has stayed active through 2026. Contracts worth nearly USD 30 billion were awarded across 114 deals in the first quarter alone, led by transport infrastructure, according to MEED. Major commitments include the AED 128 billion expansion of Al Maktoum International Airport, and Dubai Holding awarded its largest single contract to date, an AED 5 billion deal for its new headquarters and a residential tower on Sheikh Zayed Road.
Across the country, around 700 confirmed construction projects are valued at approximately USD 138 billion, according to Arcadis, with capital increasingly directed toward data centers, healthcare facilities and advanced manufacturing.
Navigating Rising Construction Costs
Construction costs have become a sharper concern this year, and forecasts vary. Arcadis reports construction cost inflation in the UAE holding at 3.5% to 4.5%. Consultancy Matthews has forecast higher tender price inflation of 6% to 9% for 2026, with building costs rising by up to 12%, as fuel, freight and insurance costs following the regional conflict feed into contractor pricing.
For developers, this places more weight on cost control and early procurement, for owners of completed buildings, planned maintenance and well-funded reserves become more valuable, since deferred repairs will cost more to fix later.
Office Space Demand Reflects Economic Strength
Dubai’s office market remains active despite more cautious decision-making by occupiers. Dubai Land Department data shows 38,082 office leasing transactions in Q2 2026, up 4% on the previous quarter, with new leases rising 16%. Average office rents held steady at AED 238 per square foot, the first quarter without rental growth since the first half of 2021.
New supply is arriving gradually. Over 880,000 square feet of office space was delivered in Q2 2026, with a further 1.13 million square feet due by year-end, much of it already pre-let. Softening has been concentrated in Grade B buildings, while Grade A and institutionally owned assets remain resilient. Investor appetite is strong too, with off-plan office sales reaching a record AED 13.1 billion in the first half of the year.
Balancing Growth in a Maturing Market
Dubai enters the second half of 2026 with demand intact and a far larger supply of homes coming through. That combination rewards owners who treat their property as an operating asset. Buildings with transparent service charges, responsive maintenance and a consistent resident experience are best placed to hold their rents and values as tenants gain more choice.
For owners looking to protect their returns through this next phase, KAIZEN’s property management team can assess how a building or unit is positioned in today’s market.
