Dubai’s real estate sector is heading into 2026 on a strong footing, supported by economic expansion, population growth and continued infrastructure investment, according to Economy Middle East, citing a new report from ValuStrat.
ValuStrat forecasts GDP growth of around 5% for Dubai, driven by non-oil sectors including tourism, construction, real estate and financial services. Inflation is expected to remain contained at around 2%, helping preserve purchasing power and maintain a stable environment for investors and businesses.
Population growth remains a key demand driver. Dubai’s resident population is projected to reach 4.7 million by the end of 2026, with peak-hour population levels approaching 6.5 million, reinforcing long-term demand for housing, offices and urban infrastructure.
Residential price growth is expected to continue, though at a more measured pace. ValuStrat forecasts capital gains of around 10% in 2026, down from 19.8% in 2025, reflecting market normalisation after several years of rapid expansion. Performance is expected to diverge by asset type, with villas and townhouses forecast to rise by 17.7%, significantly outperforming apartments, which are expected to increase by 7.4%.
Demand is expected to remain strongest for single-family homes, which account for less than 20% of Dubai’s residential stock, while the 2026 supply pipeline is estimated at 131,234 units, mostly apartments. ValuStrat notes that construction timelines may delay actual deliveries.
Rental growth is expected to stabilise at 0%, as affordability thresholds are tested across established communities.
Dubai’s office market is forecast to remain one of the strongest performers globally. ValuStrat expects around 15% growth in office capital values and rents, supported by corporate expansion and persistent supply constraints in prime locations.
Beyond residential and offices, the outlook highlights continued strength in hospitality, underpinned by Dubai’s role as a global tourism and events hub, while industrial demand is expected to continue outpacing supply. Retail performance remains shaped by structural shifts in consumer spending and e-commerce adoption.
Overall, ValuStrat’s outlook suggests Dubai’s real estate market is transitioning from rapid growth toward a more stable, fundamentals-led phase in 2026.
Link to the full article >
Download The Full Dubai Real Estate Market Outlook 2026 Report >
