Key takeaways
- Market stabilisation: Residential capital value declines slowed to a marginal 0.3% in July 2026, pointing towards stabilisation following steeper drops of 6% in March and 2% in April.
- Transaction rebound: Ready-home sales grew by 11.4% month-on-month, showing a resurgence in buyer activity as investors capitalise on recalibrated pricing.
- Off-plan dominance: Off-plan transactions continued to account for the majority of the market, representing 73% of all sales.
- Remortgaging trend: Refinancing activity remained high, with remortgaging accounting for 47% of all mortgage transactions in Q2 2026, totalling AED 20 billion.
- Property divergence: Freehold villas are now valued 187% above post-pandemic levels, whilst apartments remain approximately 8% below their 2014 peak.
How is the Dubai residential market performing in July 2026?
Featured on Dubai Eye 103.8, Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, provided insights into the July 2026 Dubai residential ValuStrat Price Index (VPI). The data indicates that Dubai's property market is edging towards stability. The marginal 0.3% month-on-month decline in July points to a flattening curve following sharper adjustments earlier in the year, which included a 6% drop in March, a 2% decline in April, and 1% in June.
Despite these recent price adjustments, buyer confidence has shown clear signs of a rebound. Ready-home sales increased by 11.4% month-on-month, as buyers returned to the market to take advantage of current discounts and adjusted valuations. Furthermore, the off-plan sector continues to demonstrate positive long-term sentiment, accounting for 73% of total sales even amid a slight reduction in developer launches this year.
What is driving the divergence between villas and apartments?
A dramatic divergence persists between villa and apartment performance. Tuaima explained that while all freehold villas are now valued 187% above post-pandemic levels, apartments are sitting roughly 8% below their 2014 peak. This split is largely driven by supply and demand dynamics; villas and townhouses make up only 20% of Dubai's housing stock, whilst the vast majority of existing stock and new supply consists of apartments. The post-pandemic demand for larger, single-family homes with private space created a sustained rush for villas, significantly driving up their values.
Additionally, the ValuStrat valuations team has observed significant refinancing activity across the market. During the second quarter, 47% of all mortgage transactions were for remortgaging, equating to AED 20 billion in total value. Looking ahead, the majority of the 72 locations monitored by ValuStrat recorded zero monthly price change in July, suggesting that the stabilisation trend is likely to hold through the second half of the year as the market normalises.
