Dubai’s real estate market is expected to transition into a more normalised phase in 2026, with residential price growth moderating while the office sector continues to outperform, 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 following several years of rapid appreciation. In its base case, residential rents are expected to remain broadly flat, as affordability constraints and a softer leasing cycle shape tenant behaviour.
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 projected to increase by 7.4%. This gap reflects Dubai’s supply mix, with single-family homes accounting for less than 20% of total residential stock, while the 2026 delivery pipeline remains heavily skewed toward apartments.
The residential supply pipeline for 2026 is forecast at 131,234 units, of which approximately 81% are apartments. ValuStrat notes that delivery timelines are frequently revised, which may temper actual completions and transaction volumes next year.
By contrast, Dubai’s office market is expected to remain supply-constrained, particularly in prime Grade A locations. ValuStrat forecasts around 15% growth in both office capital values and rents in 2026, supported by continued corporate expansion and limited new supply. Approximately 153,000 sq m of office GLA is expected to be delivered, taking total stock close to 10 million sq m.
Beyond residential and offices, ValuStrat’s outlook highlights continued support for hospitality performance, steady industrial demand outpacing supply, and ongoing structural adjustment in the retail sector.
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