REPORT
Dubai Residential Market Performance Q3 2026
Executive Summary Dubai’s residential market is showing signs of a cyclical
Supply remains a key concern for the market outlook.
correction, as weakening transaction activity, softer pricing, and a
Approximately 38,000 residential units were completed during
substantial pipeline of new supply weigh on market conditions.
the first nine months of 2026, already exceeding the full-year
Residential sales transactions fell to 33,900, down 38.6%
totals recorded in both 2023 and 2024. The pipeline is
year-on-year and the lowest quarterly volume since Q1 2024. The
considerably larger in the years ahead, with around 291,800 units
decline was concentrated in the off-plan segment, where
scheduled for delivery in 2027 and 2028. While actual
transactions fell 41.9% year-on-year, while ready-market activity
completions are likely to differ from scheduled figures, the
recorded a partial quarterly recovery but remained well below
volume of incoming supply could add further pressure to sales
the levels seen a year earlier. The slowdown in new project
prices and rents, particularly if demand does not expand
launches also continued, with the number of projects launched
sufficiently to absorb the additional stock.
during the first nine months of 2026 falling 67.7% year-on-year. The macroeconomic environment adds to the uncertainty. The Price trends have also weakened. The average residential sales
UAE economy slowed in the first half of 2026 amid regional
price stood at AED 1,644 per sq. ft in September, down 2.2%
disruptions, although purchasing managers’ index readings
year-on-year and representing the first annual decline since the
improved through Q3, indicating stronger non-oil private-sector
post-pandemic recovery began. Although prices edged up 0.3%
business conditions. Nevertheless, the IMF’s latest projections
quarter-on-quarter in Q3, this provides limited evidence of a
point to a challenging near-term outlook, with the UAE economy
broader turnaround given the continued weakness in transaction
forecast to contract in 2026 before rebounding in 2027, subject to
activity. The rental market has shown a similar loss of momentum,
an easing of regional disruptions. For Dubai’s residential market,
with annual rental growth slowing from 11.5% in September 2025
the combination of weaker transaction activity, softer prices and
to 5.5% in September 2026. The share of rental transactions
rents, more cautious buyer sentiment and a substantial supply
recording increases fell from 59.4% in Q1 2026 to 40% in Q3, while
pipeline indicate that market conditions are likely to remain
the transactions recording decreases rose from 4.8% to 21.4%,
challenging.
pointing to diminishing landlord pricing power and greater scope for tenants to negotiate.
Market Snapshot for Q3 2026 Sales Transactions
33,900 (-38.6%) Y-on-Y
Sales Value Q3 2026
AED 72.6 billion
-47.6% Y-on-Y
2
Dubai Residential Market Performance Q3 2026
July 2026
August 2026
September 2026
12,765 (-32.7%) Y-on-Y
10,902 (-38.4%) Y-on-Y
10,302 (-44.9%) Y-on-Y
Sales Price
-2.2% Y-on-Y
Rental Rate
+5.5% Y-on-Y
Residential Supply
12,400
Completed in Q3 2026
24,400
Upcoming Supply in 2026
Macroeconomic Overview and Outlook The UAE economy slowed during the first half of 2026, as
regional disruptions ease and trade and energy flows normalise.
regional disruptions weighed on activity across a broad range of
Inflation is projected at 4.5% in 2026, elevated relative to recent
sectors. Real GDP grew by 0.4% year-on-year in H1 2026, while
years, before moderating to 2.5% in 2027. These projections
non-oil GDP expanded by 1.8%. Momentum weakened in Q2, with
highlight
GDP contracting by 2.1% year-on-year following growth of 3.0% in
developments, while the anticipated rebound in 2027 points to
Q1. The weakness was most pronounced in accommodation and
the potential for a stronger recovery if disruptions ease.
food services, transportation and storage, manufacturing, and wholesale and retail trade. Dubai's economy faced similar headwinds, with real GDP declining by 2.3% year-on-year in H1 2026 to AED 473 billion. GDP stood at AED 232 billion in Q2, down 6.8% year-on-year. More recent data points to an improvement in private sector momentum through Q3 2026. The UAE's S&P Global PMI rose from 50.8 in June 2026 to 52.7 in July, before reaching 55.3 in both August and September, signalling a strengthening in non-oil private sector business conditions, supported by faster output growth and an expansion in new orders. The Dubai PMI similarly improved, rising to 54.5 in September from 54.1 in August. Despite this improvement in business activity, the International Monetary Fund's latest projections point to a challenging full-year outlook. UAE real GDP is forecast to contract by 3.9% in 2026 before returning to growth of 7.7% in 2027, assuming
3
Dubai Residential Market Performance Q3 2026
the
UAE
economy's
exposure
to
regional
While the near-term outlook remains uncertain, the UAE's diversified economic base, continued public investment and strong fiscal position should help support economic activity and facilitate a recovery as regional conditions improve.
Sales Transactions Sales Transactions: By Volume After peaking at 55,400 transactions in Q3 2025, residential sales activity has declined over four consecutive quarters, reaching 33,900 in Q3 2026, down 38.6% year-on-year and 2% quarter-on-quarter. This was the lowest quarterly volume since Q1 2024. The off-plan segment continued to account for the majority of activity, representing 72.2% of total transactions, with 24,500 units sold. However, the segment recorded a sharper contraction, down 41.9% year-on-year and 8.4% quarter-on-quarter, amid a slowdown in new project launches compared with the elevated levels recorded through 2024 and much of 2025. The ready segment, by contrast, recorded 9,400 transactions, recovering 19.7% quarter-on-quarter from the lower levels recorded in Q2 2026, although volumes remained 28% below Q3 2025. While ready transactions bore the brunt of the initial slowdown, the sharper year-on-year decline has since shifted to the off-plan segment as registration lags unwind and the slowdown feeds through to recorded transaction volumes. Overall, residential sales activity continued to moderate in Q3 2026 amid a more measured pace of new project launches and heightened regional geopolitical uncertainty, which has contributed to a more cautious buyer environment.
Sales Transactions - By Volume 60k
55.3k
53.4k
49.7k
45k
13.1k
42.3k
44k
14.1k 14k
11.8k
34.7k
34k
13k
30k
7.9k
42.2k
15k
0k
35.7k
39.3k 32.1k
29.3k
Q1 2025
9.4k
26.8k
Q2 2025
Q3 2025 Off-Plan Transactions
Q4 2025 Ready Transactions
Q1 2026
Q2 2026
24.5k
Q3 2026
Total Sales Transactions
Change in Transaction Volume (%) Q-on-Q
-8.4%
+19.7%
-2%
Y-on-Y
-41.9%
-28%
-38.6%
Source: Cavendish Maxwell, Property Monitor
4
Dubai Residential Market Performance Q3 2026
Sales Transactions: By Value The total value of residential transactions reached AED 72.6 billion in Q3 2026, down 13.2% quarter-on-quarter and 47.6% year-on-year, extending the broad-based decline from the peaks recorded through 2025. Off-plan transactions accounted for the largest share of value at AED 47.1 billion, though the segment recorded the steeper contraction, falling 24.3% quarter-on-quarter and 54.8% year-on-year, with the value decline outpacing the corresponding volume drop of 41.9%. The ready segment partially recovered from a weak Q2 2026, with values rising 19.1% quarter-on-quarter to AED 25.5 billion, though the 25.7% year-on-year decline suggests the quarterly gain partly reflects the low base in Q2 rather than a broader improvement in activity.
Sales Transactions - By Value (AED Billions) 147.9B
160B
138.5B
140B
136B
137.2B
35.2B
120B 100B
34.4B
114.2B
33.5B
38.4B
83.6B
35.1B
72.6B
80B
21.4B
60B 40B
112.7B
104.1B
25.5B
102.5B
98.9B
79.2B
62.2B 47.1B
20B .0B
Q1 2025
Q2 2025
Q3 2025 Off-Plan Transactions
Q4 2025 Ready Transactions
Q1 2026
Q2 2026
Q3 2026
Total Sales Transactions
Change in Transaction Value (%) Q-on-Q
-24.3%
+19.1%
-13.2%
Y-on-Y
-54.8%
-25.7%
-47.6%
Source: Cavendish Maxwell, Property Monitor
5
Dubai Residential Market Performance Q3 2026
Dubai’s residential market is showing signs of a cyclical correction, with declining transaction volumes and softening prices. However, mortgage activity remains a relative bright spot, with transaction values reaching a record AED 21.8 billion in Q3
2026,
highlighting
the
continued
importance of mortgage financing in supporting residential demand. As further handovers increase the availability of ready properties, mortgage activity could provide an important source of support for the market, although this will depend on financing conditions and the pace of demand absorption.
Ronan Arthur Director, Head of Residential Valuation
Sales Transactions: Off-Plan vs. Ready Property Transactions Off-plan transactions continued to account for the majority of residential sales in Q3 2026, although their share declined to 72.2%, from 77.2% in Q2 2026 and 76.3% in Q3 2025. However, this shift is likely driven by the sharper decline in off-plan transaction volumes rather than a material increase in ready demand and should therefore be interpreted with caution as an indicator of changing buyer preferences.
Sales by Transaction Type – Q3 2026
27.8%
72.2%
Off-Plan Transactions
Ready Transactions
Source: Cavendish Maxwell, Property Monitor
6
Dubai Residential Market Performance Q3 2026
Market Share by Transaction Type
Q3 2026
Q-on-Q Change in Market Share (%)
Y-on-Y Change in Market Share (%)
Off-Plan
72.2%
-5%
-4.1%
Ready
27.8%
+5%
+4.1%
Sales Transactions: By Sales Sequence (Off-Plan) Initial sales continued to account for the majority of off-plan transactions in Q3 2026, representing 90.5% of activity. However, initial sales fell 10.8% quarter-on-quarter and 43.5% year-on-year to 22,200 transactions, driving the overall decline in off-plan activity. Resales, by contrast, increased 23.5% quarter-on-quarter to 2,300 transactions, although volumes remained 14.3% below Q3 2025. Interestingly, only around 17.1% of off-plan initial-sale transactions recorded in the first nine months of 2026 related to projects launched during 2026, with the majority involving projects launched in earlier years.
Off-Plan Sales Transactions by Sales Sequence - Q3 2026
9.5%
Market Share by Transaction Type
Q3 2026
Q-on-Q Change in Market Share (%)
Y-on-Y Change in Market Share (%)
Initial Sales
90.5%
-2.5%
-3%
Resale
9.5%
+2.5%
+3%
90.5%
Initial Sale
Resale
Source: Cavendish Maxwell, Property Monitor
Sales Transactions: By Sales Sequence (Ready) Resales continued to dominate ready residential transactions in Q3 2026, accounting for 86.3% of activity. Resale volumes increased 22.3% quarter-on-quarter to 8,100 transactions, recovering from the sharp decline recorded in Q2, although they remained 24.2% below Q3 2025. Initial sales also increased, rising 6.4% quarter-on-quarter to 1,300 transactions, but remained 44.4% lower year-on-year.
Ready Sales Transactions by Sales Sequence - Q3 2026
13.7%
86.3%
Initial Sale
Resale
Source: Cavendish Maxwell, Property Monitor
7
Dubai Residential Market Performance Q3 2026
Market Share by Transaction Type
Q3 2026
Q-on-Q Change in Market Share (%)
Y-on-Y Change in Market Share (%)
Initial Sales
13.7%
-1.7%
-4.1%
Resale
86.3%
+1.7%
+4.1%
Sales Transactions: By Property Type (Off-Plan Properties) By property type, apartments continued to account for the majority of off-plan activity in Q3 2026, with 22,300 transactions, down 40.6% year-on-year and 7.9% quarter-on-quarter. The value of apartment transactions fell by a steeper 54.3% year-on-year, indicating a decline in the average value of properties transacted. Villas recorded the sharpest contraction, with transactions falling 78.2% year-on-year and 34.9% quarter-on-quarter to just 500. Townhouses recorded the most moderate decline, with transactions down 30.6% year-on-year and 4.7% quarter-on-quarter to 1,700.
Off-Plan Sales Transactions by Property Type – Q3 2026 1.9% 7.1%
91%
Apartments
Townhouses
Market Share by Property Type
Q3 2026
Q-on-Q Change in Market Share (%)
Y-on-Y Change in Market Share (%)
Apartments
91%
+0.5%
+2%
Townhouses
7.1%
+0.3%
+1.2%
Villas
1.9%
-0.8%
-3.2%
Villas
Source: Cavendish Maxwell, Property Monitor
Sales Transactions: By Property Type (Ready Properties) Ready-market activity increased across all three property types in Q3 2026, with apartments recording 7,500 transactions, up 19.3% quarter-on-quarter but down 29.2% year-on-year. Townhouse transactions also increased, rising 25.1% quarter-on-quarter to 1,400, although volumes remained 19.0% below Q3 2025. Villas recorded a more modest quarterly recovery, with transactions increasing 13.5% to 600, but remained 31.6% lower year-on-year.
Ready Sales Transactions by Property Type – Q3 2026
6.3% 14.8%
78.9%
Apartments
Townhouses
Villas
Source: Cavendish Maxwell, Property Monitor
8
Dubai Residential Market Performance Q3 2026
Market Share by Property Type
Q3 2026
Q-on-Q Change in Market Share (%)
Y-on-Y Change in Market Share (%)
Apartments
78.9%
-0.3%
-1.3%
Townhouses
14.8%
+0.6%
+1.6%
Villas
6.3%
-0.3%
-0.3%
Off-Plan Property Sales Transactions
Sales Transactions: Top Five Locations
Volume of Transactions
5,000
4,776
4,000 3,500 1,865
2,000
1,283
1,000
946
0 Dubai South
For Apartment Transactions by Volume – Q3 2026
Downtown Jebel Ali
Azizi Milan
Jumeirah Village Dubai Residence Circle Complex
Ready Property Sales Transactions
Volume of Transactions
1,200
Source: Cavendish Maxwell, Property Monitor
1,153
1,111
1,000 800 555
600
456
400
304
278
Downtown Dubai
Arjan
200 0 Jumeirah Village Circle
Business Bay
Dubai Marina
Off-Plan Property Sales Transactions 300
282
263
For Villa/Townhouse Transactions by Volume – Q3 2026
Source: Cavendish Maxwell, Property Monitor
204
150 117
100 50 0
Dubai Residential Market Performance Q3 2026
DAMAC Islands 2
Dubai Investments Parks
Dubai South
DAMAC Island
Ready Property Sales Transactions 250
211
200
176
150
129
100
84
83
The Valley
Arabian Ranches 3
50 0 DAMAC Lagoons
9
243
200
Sobha Sanctuary
Volume of Transactions
Sales Transactions: Top Five Locations
Volume of Transactions
250
DAMAC Hills 2
Mudon
Sales Transactions: Luxury Properties (AED 20 million and above) Residential luxury transactions fell 28.4% quarter-on-quarter and 40.5% year-on-year to 257 in Q3 2026, with a total transaction value of AED 9.6 billion. Off-plan sales accounted for most of the decline, falling to 148 transactions, while ready luxury transactions increased 6.9% quarter-on-quarter to 109, although remaining 33.1% below Q3 2025. The 40.5% year-on-year decline was broadly in line with the wider residential market, indicating that the luxury segment has also been affected by the broader slowdown. Despite this, transactions continued to be recorded across both segments amid heightened regional geopolitical uncertainty, highlighting the appeal of Dubai's luxury residential market to high-net-worth and ultra-high-net-worth individuals.
Luxury Property Sales Transactions - By Volume 871
900
720
800 700
582
584
600 432
500
359
400
257
300 200 100 0
Q1 2025
Q2 2025
Q3 2025 Off-Plan Transactions
Q4 2025 Ready Transactions
Q1 2026
Q2 2026
Q3 2026
Total Sales Transactions
Source: Cavendish Maxwell, Property Monitor
Sales Transactions: Ultra-Luxury Properties (AED 50 million and above) Ultra-luxury residential transactions, fell to 42 in Q3 2026, down 41.7% quarter-on-quarter and 34.4% year-on-year. Of these, around nine transactions were valued at more than AED 100 million, highlighting that activity continued at the very top end of the market. The decline was driven primarily by off-plan sales, which dropped 59.2% quarter-on-quarter to 20 transactions, their lowest quarterly level in the last couple of years. Ready transactions were comparatively stable at 22, down 4.3% quarter-on-quarter and 15.4% year-on-year.
Ultra-Luxury Property Sales Transactions - By Volume 86
90
82
80 64
70 60
72
70
56 42
50 40 30 20 10 0
Q1 2025
Q2 2025
Q3 2025 Off-Plan Transactions
Source: Cavendish Maxwell, Property Monitor
10
Dubai Residential Market Performance Q3 2026
Q4 2025 Ready Transactions
Q1 2026 Total Sales Transactions
Q2 2026
Q3 2026
Mortgage Transactions Mortgage transactions recovered in Q3 2026, rising 32.9% quarter-on-quarter to approximately 10,000, and were 2.7% higher year-on-year. Apartment mortgage transactions increased 29.2% quarter-on-quarter to around 6,100, although they remained 3.5% below Q3 2025. Townhouse and villa mortgage transactions recorded a stronger increase, rising 39% quarter-on-quarter to around 3,900 and 13.9% year-on-year. The increase can be attributed to property handovers and refinancing, alongside mortgage-financed property purchases.
Mortgage Transactions - By Volume 15k 13k 11k 9k
9.4k
10k
9.6k 8.7k
7.9k
7.5k 3.2k
7k
9.7k
3.5k
3.9k
3.5k
3k
2.7k
2.8k
5k 3k 5.1k
6.3k
6.3k
6.2k
5.7k
1k 0k
Q1 2025
Q2 2025
Q3 2025 Apartments
Q4 2025 Townhouses/Villas
Q1 2026
6.1k 4.7k
Q2 2026
Q3 2026
Total
Change in Transaction Volume (%) Q-on-Q
+29.2%
+39%
+32.9%
Y-on-Y
-3.5%
+13.9%
+2.7%
Source: Cavendish Maxwell, Property Monitor
11
Dubai Residential Market Performance Q3 2026
The value of mortgage transactions reached a new high of AED 21.8 billion in Q3 2026, up 33.4% quarter-on-quarter and 8.1% year-on-year, surpassing the previous peak of AED 20.5 billion recorded in Q4 2025. Townhouse and villa mortgage values rose 32.2% quarter-on-quarter and 10.6% year-on-year to AED 13.6 billion, accounting for 62.2% of the total in Q3 2026. Apartment mortgage values reached AED 8.2 billion, up 35.2% quarter-on-quarter and 4.2% year-on-year.
Mortgage Transactions - By Value 25B 20B
20.2B
20.5B
17B
16.4B
15B
11.4B
10B
12.3B
12.5B
0B
13.6B
12.4B 10.3B
10B 5B
21.8B
20.3B
19.8B
7B
8.4B
7.9B
8B
7.9B
6.1B
Q1 2025
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Apartments
Townhouses/Villas
8.2B
Q3 2026
Total
Change in Transaction Value (%) Q-on-Q
+35.2%
+32.2%
+33.4%
Y-on-Y
+4.2%
+10.6%
+8.1%
Source: Cavendish Maxwell, Property Monitor
12
Dubai Residential Market Performance Q3 2026
New Project Launches New project launches remained significantly subdued in Q3 2026, with 48 projects and 15,300 units brought to market, down 72.7% and 62.9% year-on-year, respectively, even as the number of launches picked up on a quarterly basis. In the first nine months of 2026, 190 projects comprising 49,800 units were launched, down 67.7% and 65.5%, respectively, compared with around 590 projects and 144,000 units in the same period of 2025, with the majority of 2026 launches concentrated in Q1. The contraction highlights a significant scaling back of development activity, as developer caution and heightened regional geopolitical uncertainty prompted many to defer new project introductions until market conditions provided greater clarity. Within this environment, only 17.1% of off-plan initial sales recorded in the first nine months of 2026 were for projects launched in 2026, with the remainder associated with projects launched in prior years. This suggests that buyers are largely transacting on projects launched in earlier years, while newly introduced units in 2026 have yet to be fully absorbed into the market, partly due to the typical lag between project launch and transaction registration. With demand conditions yet to show a convincing recovery, a material rebound in launch activity in the near term appears unlikely.
Number of Units and Projects 60k
250
223
50k
193
200
175
170
40k
52.9k
49.8k
46.5k
41.4k
20k
100 48 27.1k
10k 0k
150
106
30k
37 15.3k
50
7.4k Q2 2025
Q1 2025
Q3 2025
Q4 2025
Number of New Launches Units
Q2 2026
Q1 2026
Q3 2026
Number of New Launches Project
Source: Cavendish Maxwell, Property Monitor
At a property-type level, apartments continued to account for the majority of new launch activity, representing 82.2% of all units introduced in Q3 2026. Townhouses made up 12.2% of new launches, while villas represented 5.6%.
New Launches by Property Type – Q3 2026
5.6%
12.2%
82.2%
Market Share of New Unit Launches by Property Type
Q3 2026
Q-on-Q Change in Market Share (%)
Y-on-Y Change in Market Share (%)
Apartments
82.2%
-6.7%
-12.2%
Townhouses
12.2%
+8.9%
+8.9%
Villas
5.6%
-2.2%
+3.3% Source: Cavendish Maxwell, Property Monitor
Apartments
13
Townhouses
Villas
Dubai Residential Market Performance Q3 2026
Supply: Number of Completed Units Residential completions totalled 12,400 units in Q3 2026, broadly in line with the elevated pace recorded through the year and up 38.9% year-on-year, with a materialisation rate of 54.7%. Apartments accounted for the majority at 8,600 units, up 27.1% year-on-year, while villas and townhouses contributed 3,800 completions, up 76.7% year-on-year. Across the first nine months of 2026, approximately 38,000 units were completed, 41.4% more than in the same period of 2025, with a materialisation rate of 46.1%. Deliveries during the first nine months alone have already exceeded the full-year totals recorded in both 2023 and 2024, with full-year 2026 completions on track to surpass the 2025 figure. The continuing pipeline of deliveries is reshaping supply conditions across the market. The growing volume of handovers is adding to available ready stock at a time when transaction volumes have moderated, widening the gap between new supply entering the market and the pace at which it is being absorbed. This is also expected to affect the rental segment, where the expansion of available stock is easing the supply constraints that had supported strong rental growth in prior years. With more units competing for tenants, landlords in areas with concentrated deliveries face increasing pressure to price their properties competitively. As a result, the broad-based increase in supply is likely to weigh on rental value growth going forward, particularly in the apartment segment, which accounts for the largest share of completions.
Completed Units (in Thousands) 25k
20k
15k
13.1k
12.9k
10.6k
10k
8.9k 2.3k
1.2k
12.7k 0.9k
3.8k
5.1k
7.4k
12.4k
2.1k
5k
2.5k 8.3k 4.9k
0k
Q1 2025
Q2 2025
Source: Cavendish Maxwell, Property Monitor
14
Dubai Residential Market Performance Q3 2026
11.9k
11.8k
8.6k
7.8k
6.8k
Q3 2025
Q4 2025
Apartments
Villas/Townhouses
Q1 2026 Total Residential Units
Q2 2026
Q3 2026
Upcoming Supply Approximately 24,400 residential units are scheduled for delivery during the remainder of 2026, with apartments accounting for the majority at around 83% of projected supply. However, based on historical materialisation rates, actual completions are expected to range between 7,300 and 12,200 units. Looking further ahead, the pipeline points to a considerably larger volume of supply, with approximately 136,100 units scheduled for delivery in 2027, rising to 155,700 units in 2028. This brings total scheduled deliveries across the two years to around 291,800 units. While construction delays could shift some handovers into later periods, the volume of units already under construction represents a substantial pipeline of future supply, with delays more likely to affect the timing of deliveries than materially reduce the overall volume. Apartments are expected to dominate scheduled deliveries in both years, although the villa and townhouse segment is set to record a notable increase in 2028, with projected completions more than doubling from the previous year. Even allowing for historical materialisation rates, the volume of units likely to reach handover in 2027 and 2028 represents a considerable addition to ready stock, potentially adding to the supply-side pressure already evident in the market. The extent to which this additional stock can be absorbed without placing further pressure on market conditions will depend partly on whether population growth and household formation keep pace with new supply. This would require demand to expand sufficiently to accommodate the incoming units, with the scale of deliveries making absorption an increasingly important factor in the market's outlook.
Upcoming Supply (in Thousands) 155.7k
160k 136.1k
140k
24.1k
11.8k
120k 100k 80k 60k 40k 20k
131.6k
124.3k
24.4k 4.1k 20.3k
0k
2027
Rest of 2026 Apartments
Source: Cavendish Maxwell, Property Monitor
15
Dubai Residential Market Performance Q3 2026
Villas/Townhouses
2028 Total Residential Units
Sales Price Trend Residential sales prices in Dubai have followed a distinctly cyclical trajectory since 2008, characterised by two major correction phases, two recovery cycles and the early signs of a third correction. Following a period of strong growth, price appreciation slowed considerably over the past year. Annual price growth eased from 16.1% in September 2025 to 12.1% in December 2025 and 9.6% in March 2026, before turning negative in August 2026 for the first time since the recovery began. By September 2026, the average sales price stood at AED 1,644 per sq. ft, down 2.2% year-on-year. On a quarterly basis, prices edged up by 0.3% in Q3 2026, following a 2.6% decline in Q2. However, this modest quarterly increase is not yet sufficient to indicate a clear reversal of the broader softening trend. The moderation in prices reflects a combination of factors rather than a single trigger. On the supply side, the acceleration in residential completions is adding to the available stock of ready properties, while transaction activity has weakened. Regional geopolitical tensions have also weighed on market sentiment, contributing to greater caution among buyers and investors. Housing finance conditions have softened as well, with demand for both owner-occupier and investment housing loans declining, alongside reduced lending appetite among financial institutions. Although housing finance demand is expected to strengthen, the earlier decline in demand and lending appetite points to more cautious financing conditions at a time when residential sales activity is also moderating. Looking ahead, the substantial volume of residential supply scheduled for delivery in 2027 and 2028 is likely to add to pricing pressure, particularly if demand does not keep pace with the expansion in available stock. While quarterly prices recorded a modest increase in Q3, the annual decline, weaker transaction activity and expanding supply pipeline suggest that downward pressure on prices could persist in the near term.
Sales Price Trend (in AED/SQF) 2,000 1,800 1,600
1,609
1,681
1,673
1,683
Q3 2025
Q4 2025
Q1 2026
1,639
1,644
Q2 2026
Q3 2026
1,535
1,400 1,200 1,000 800 600 400 200 0
Q1 2025
Q2 2025
Source: Cavendish Maxwell, Property Monitor
16
Dubai Residential Market Performance Q3 2026
Rental Rate Trend Dubai’s residential rental rates stood at AED 77.3 per sq. ft in September 2026, up 5.5% year-on-year. However, the pace of growth had slowed, with annual growth easing from 11.5% in September 2025. Although rates declined during Q2 2026, they recovered in Q3 to return to their March 2026 level. The slowdown was also apparent in changes to rents recorded across rental transactions. In Q1 2026, rents increased relative to the previous contract in 59.4% of transactions, while only 4.8% recorded a decrease. By Q3, the share of transactions with rent increases had fallen to 40%, while those recording decreases had risen to 21.4%. A further 38.7% recorded no change in rent. This shift points to diminishing landlord pricing power and greater scope for tenants to negotiate, with the growing supply of completed units giving tenants more choice and easing upward pressure on rental rates.
Rental Price Trend (in AED/SQF/YEAR) 90 80
76.7
77.3
Q4 2025
Q1 2026
73.2 69.6
69.9
Q1 2025
Q2 2025
77.3
75.4
70 60 50 40 30 20 10 0
Q3 2025
Q2 2026
Q3 2026
Source: Cavendish Maxwell, Property Monitor
In Q3 2026, more than 172,000 rental contracts were registered across Dubai's residential market. Renewal contracts accounted for 94,300 transactions, down 10.6% year-on-year, while new contracts totalled 77,700 transactions, up 18.2% over the same period.
Volume of Rental Contracts 300k 250k 200k 150k
167k
0
174.6k
170.8k
65.7k
66.4k
61k
141.3k 56.1k
110.8k
Q1 2025
90.5k
Q2 2025
17
Dubai Residential Market Performance Q3 2026
77.7k 49.8k
105.5k
108.2k
109.8k
Q3 2025
Q4 2025
Q1 2026
Renewal Source: Cavendish Maxwell, Property Monitor
172k 137.2k
50.8k
100k 50k
171.3k
New
Overall
87.3k
94.3k
Q2 2026
Q3 2026
Gross Rental Yields: Apartments and Villas/Townhouses Dubai’s gross rental yields stood at 6.6% for apartments and 4.9% for villas and townhouses in Q3 2026. Although apartment yields eased slightly compared with the same period last year, they continued to offer attractive returns relative to many major global residential markets. At a community level, Dubai Investment Park, International City, Dubai Production City, and International City Phase 2 recorded the highest apartment yields, while Dubai Industrial City, Jumeirah Golf Estates and DAMAC Hills 2 led the villa and townhouse segment.
Top 10 Areas by Gross Rental Yields – Apartments 12% 10%
10%
9% 8%
8%
7.9%
7.8%
7.8%
7.7%
7.6%
7.4%
6.6%
6% 4% 2% 0%
Dubai Apartments Citywide
Dubai Investments Park
International City
Dubai Production City
International City Phase 2
Discovery Gardens
DAMAC Hills 2 Dubai Sports City
Liwan
Downtown Jebel Ali
Source: Cavendish Maxwell, Property Monitor
Top 10 Areas by Gross Rental Yields – Villas/Townhouses 12% 10% 8% 6%
6.5% 5.8% 4.9%
5.7%
5.3%
5.2%
5.1%
5.1%
5%
4.9%
Villanova
District One MBR City
Town Square
Mudon
Serena
4% 2% 0%
Dubai Villas/ Townhouses Citywide
Jumeirah Golf DAMAC Hills 2 DAMAC Hills Dubai Estates Industrial City
Source: Cavendish Maxwell, Property Monitor
18
Dubai Residential Market Performance Q3 2026
2026 Real Estate Market Outlook Dubai's residential market is showing early signs of a cyclical
expanding supply pipeline creates a difficult environment for
correction, with the near-term outlook increasingly weighed down
price recovery, and downward pressure on values is expected to
by a confluence of supply-side expansion, deteriorating demand
persist into 2027.
conditions, and a more uncertain macroeconomic and geopolitical environment.
Rental market conditions point to a similarly challenging picture.
Transaction volumes have now declined over four consecutive
September 2025 to 5.5% in September 2026, and further
quarters, reaching 33,900 in Q3 2026, the lowest level since Q1
compression is likely. The transaction-level data is particularly
2024 and 38.6% below the peak recorded just one year earlier. With
telling, with the share of rental transactions recording rent
new project launches down 62.9% year-on-year in Q3 2026 and
increases falling from 59.4% in Q1 2026 to 40.0% in Q3 2026, while
65.5% across the first nine months of the year, off-plan activity is
the share recording decreases surged from 4.8% to 21.4% over the
unlikely to see meaningful recovery in the near term. Developer
same period. Landlord pricing power is diminishing, and with a
caution is deepening, and without significant improvement in both
growing volume of completed units entering the rental pool, the
market conditions and the regional geopolitical environment, a
conditions that supported double-digit rental growth through
sustained rebound in launch activity appears unlikely. The ready
2024 and 2025 have effectively reversed.
segment showed a modest quarterly recovery in Q3 2026, though volumes remained 28% below Q3 2025. With buyer sentiment still
Annual rental growth has decelerated sharply from 11.5% in
The scale of the incoming supply pipeline represents the most
cautious, any recovery in transaction activity will likely be gradual.
significant and immediate potential structural risk to the market.
At the same time, residential sales prices have turned negative on
2027 and 2028, the volume of supply entering the market is set to
an annual basis for the first time since the post-pandemic recovery
remain at an elevated level well beyond the current period of
began. While the modest 0.3% quarterly gain in Q3 2026 provides
adjustment. However, based on historical materialisation rates of
some near-term support, it offers limited evidence of a broader
around 30% to 50%, the actual volume of supply entering the
change in the market given the softening in transaction activity.
market could be considerably lower than the scheduled figure.
Regional geopolitical tensions continue to weigh on investor
Even at these historical materialisation rates, the additional stock
confidence and buyer sentiment, while financing conditions have
would
become tighter, with the UAE Central Bank's Credit Sentiment
employment and investment demand to expand materially and
Survey recording declines in demand for both owner-occupier and
consistently to be absorbed without placing sustained downward
investment housing loans, alongside a reduction in lending
pressure on both prices and rents. In the absence of a sufficiently
appetite among financial institutions. Although housing finance
strong demand-side response, the market faces a challenging
demand is expected to strengthen in the quarters ahead, the
period ahead, including the prospect of potential oversupply.
earlier decline in demand and lending appetite points to more cautious financing conditions at a time when residential sales activity is also moderating. The combination of weaker economic conditions, subdued buyer sentiment, tighter credit, and an
19
Dubai Residential Market Performance Q3 2026
With approximately 291,800 units scheduled for delivery across
require
population
growth,
household
formation,
Authors Julian Roche
Ali Siddiqui
Chief Economist Cavendish Maxwell julian.roche@cavendishmaxwell.com
Research Manager ali.siddiqui@cavendishmaxwell.com +971 50 877 0190
Key Contacts Zacky Sajjad
Ronan Arthur
Director, Business Development and Client Relations zacky.sajjad@cavendishmaxwell.com +971 50 644 5089
Director, Head of Residential Valuation ronan.arthur@cavendishmaxwell.com +971 50 296 1411
Dubai +971 4 453 9525 dubai@cavendishmaxwell.com 2204 Marina Plaza, Dubai Marina, P.O. Box 118624, Dubai, UAE Dubai
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Ras Al Khaimah
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Kuwait City
cavendishmaxwell.com
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