Dubai’s real estate market is expected to transition into a more normalised phase in 2026, with residential price growth moderating after several years of rapid appreciation, while the office sector continues to stand out, according to Arabian Business, citing ValuStrat’s Dubai Real Estate Outlook 2026.
ValuStrat forecasts residential capital gains of around 10% in 2026, down from 19.8% in 2025, reflecting a cooling market as affordability constraints, fewer new off-plan launches and more selective investor behaviour shape demand. In its base case, residential rents are expected to remain broadly flat, signalling a softer leasing cycle following sharp rental growth in recent years.
Performance within the residential sector is expected to diverge further by asset type. Villas and townhouses are forecast to rise by 17.7%, significantly outperforming apartments, which are expected to increase by 7.4%. This reflects Dubai’s supply mix, with single-family homes accounting for less than 20% of total residential stock, while the 2026 development pipeline remains heavily weighted toward apartments.
The residential supply pipeline for 2026 is forecast at 131,234 units, of which approximately 81% are apartments. ValuStrat cautions that construction timelines are frequently revised, which may temper actual completions and transaction volumes during the year.
By contrast, Dubai’s office market is expected to remain supply-constrained in prime submarkets. ValuStrat forecasts around 15% growth in both office capital values and rents in 2026, supported by ongoing corporate expansion and limited Grade A supply in key business districts.
Beyond residential and offices, ValuStrat’s outlook highlights continued support for hospitality and industrial assets, while retail performance remains shaped by structural shifts in consumer spending and rising e-commerce penetration.
Overall, the outlook points to a market shifting from momentum-driven growth toward more selective, fundamentals-led performance in 2026.
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