Dubai’s real estate market is entering 2026 on solid footing, transitioning from the sharp post-pandemic surge to a more stable and mature growth phase, according to Khaleej Times, citing ValuStrat’s Dubai Market Outlook 2026.
After residential capital gains of nearly 20% in 2025, ValuStrat forecasts a moderation to around 10% growth in 2026. This deceleration reflects affordability limits, fewer off-plan launches, and a more selective investor approach following several years of rapid appreciation. Despite this, underlying demand remains strong, supported by population growth, economic expansion, and continued infrastructure investment.
Performance across residential segments is expected to diverge further. Villas and townhouses are forecast to rise by 17.7%, significantly outperforming apartments, which are expected to increase by 7.4%. This imbalance is driven by the limited supply of single-family homes, which represent less than 20% of Dubai’s residential stock, against a development pipeline still heavily weighted toward apartments.
Rental markets are expected to stabilise, with flat rental growth (0%) projected in 2026 as affordability thresholds are tested across established communities. ValuStrat also notes that headline residential supply forecasts often overstate actual completions, with construction timelines likely to push a portion of deliveries beyond 2026.
The office sector remains one of Dubai’s strongest performers. ValuStrat forecasts around 15% growth in both office capital values and rents, supported by sustained corporate expansion and a shortage of Grade A space in prime districts such as DIFC and Downtown Dubai.
Beyond residential and offices, hospitality is expected to remain well supported by tourism and events activity, while industrial and logistics assets continue to benefit from supply constraints. Retail performance, however, remains shaped by structural shifts in consumer behaviour and rising e-commerce penetration.
Overall, ValuStrat’s outlook points to a market that is maturing rather than stalling, with growth increasingly driven by quality, location, and long-term fundamentals rather than momentum alone."
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