The Dubai Real Estate Market in 2026: Trends and Forecast

The Dubai real estate market enters 2026 on record foundations, with prices still rising modestly even as transaction volumes cool from the highs of recent years. Most analysts forecast growth of 3% to 8% for the year, supported by strong demand and tempered by a large supply pipeline. Apartment yields average around 6.7% to 7%, and Dubai keeps its zero-tax position on property.

This overview covers prices, volumes, supply, rents, and the forecast, so buyers and investors can read the market clearly. For a view on any community or deal, contact First Key International.

Table of contents

• Market overview 2026
• Property prices and price per square foot
• Transaction volumes in 2026
• The supply pipeline
• The rental market and yields
• Off-plan versus ready
• Is now a good time to invest?
• Forecast for 2026 and beyond
• Why investors choose Dubai
• FAQs

Market overview 2026

Dubai's market is calm and steady rather than dramatic in 2026. Demand from residents, long-term visa holders, and overseas buyers continues to support prices, while a large pipeline of new homes keeps growth in check. The result is a market that favors well-chosen communities over a broad, speculative surge.

Property prices and price per square foot

Prices are on a steady upward path using Dubai Land Department data:

• Full year 2025: 215,060 sales worth AED 682.6 billion closed at an average of AED 1,863 per square foot, all record highs.
• January 2026: the market-wide average reached AED 1,976 per square foot, an 18% year-on-year increase.
• Q2 2026: price per square foot kept rising across most communities even as deal volumes fell, led by villa communities.

The average apartment sits around AED 1.5 million, which reflects the mass-market demand that drives most transactions.

Transaction volumes in 2026

Volumes cooled in 2026 after the surge of prior years. Residential transactions fell 31% year on year in Q2 2026 to 34,850 deals, weighed down by regional uncertainty and the Eid holiday. Even so, the quarter still ranked as the third highest second quarter on record, which shows the underlying market stayed active.

This pattern, softer volumes alongside firm prices, points to a market rebalancing rather than declining.

The supply pipeline

New supply is the key factor tempering price growth. Around 120,000 residential units are scheduled for delivery in Dubai during 2026, more than triple the roughly 35,000 completed across 2025. Looking further out, an estimated 385,000 apartments are under construction across 2026 to 2028.

Supply is concentrated in a handful of zones, so localized price and rent pressure is most likely in high-supply apartment areas, while established communities with limited land stay firmer.

The rental market and yields

Gross rental yields in Dubai average around 6.7% to 7% for apartments, roughly double the returns in mature cities like London or New York. Affordable communities such as International City and Dubai Silicon Oasis saw rents rise more than 20% during 2025, outpacing prime areas.

Rents softened in some prime areas through 2026 after several years of sharp growth, which improves affordability for tenants and compresses yields at the top end.

Off-plan versus ready

Off-plan carried a majority share of transactions into 2026, reflecting strong appetite for developer payment plans and new launches. Ready property offers steadier value tied to real rental and lifestyle demand, and it generates income immediately.

For most investors, the choice comes down to timing: off-plan spreads payments over construction, while ready property starts earning from day one.

Is now a good time to invest?

The market offers a healthier entry point in 2026 than at the recent peak, especially in oversupplied apartment zones where pricing has eased. Established villa communities and well-connected districts continue to hold value.

As with any market, the decision rests on your goals and horizon. Buyers focused on income and long-term growth in strong communities are well placed, and our team can guide the community and unit selection. This is general information rather than financial advice, so confirm your own numbers before committing.

Forecast for 2026 and beyond

Most analysts forecast modest price growth of 3% to 8% for 2026, with Knight Frank projecting around 3% in prime areas. The main risks are apartment oversupply in specific zones and wider regional sentiment, while strong end-user demand and Dubai's global standing support the base case.

The medium-term picture points to steadier, sustainable growth rather than the double-digit surges of recent years.

Why investors choose Dubai

• Zero tax: no annual property tax, no capital gains tax, and no income tax on rental earnings.
• Strong yields: apartment yields around 6.7% to 7%, higher in mid-market communities.
• Residency: a property worth AED 2 million or more qualifies for the 10-year Golden Visa.
• Global demand: sustained interest from residents, long-term visa holders, and overseas buyers.

Frequently asked questions

Is the Dubai real estate market growing in 2026? Yes, modestly. Most analysts forecast price growth of 3% to 8% for 2026, with prices rising even as transaction volumes cool from recent highs.

Are Dubai property prices falling in 2026? No. Prices are holding and rising modestly. Volumes cooled in the first half of the year, and some high-supply apartment zones offer better entry pricing.

What are typical rental yields in Dubai? Apartments average around 6.7% to 7% gross, and mid-market communities can reach 7% to 9%.

How much new supply is coming to Dubai in 2026? Around 120,000 units are scheduled for 2026, with an estimated 385,000 apartments under construction across 2026 to 2028.

Is now a good time to invest in Dubai? The 2026 market offers a healthier entry point than the recent peak, particularly in eased apartment zones, though the right decision depends on your goals and horizon.

Invest in the Dubai market with First Key International

Our team tracks community-level pricing, supply, and yields, and matches you to the right opportunity. Contact First Key International for current market data and tailored advice.