Dubai’s real estate market is expected to move into a more normalised phase in 2026, with residential price growth moderating while the office sector continues to outperform, according to ZAWYA, 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 the cooling of a multi-year growth cycle. In its base case, residential rents are expected to remain broadly flat, as affordability constraints, changing tenant preferences and expanding supply influence leasing dynamics.
Performance within the residential sector is expected to diverge further by asset class. Villas and townhouses are forecast to rise by 17.7%, significantly outperforming apartments, which are projected 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 development pipeline for 2026 remains heavily skewed toward apartments.
The residential supply pipeline for 2026 is forecast at 131,234 units, comprising approximately 81% apartments and 19% villas and townhouses. ValuStrat cautions that delivery timelines are often 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 continued corporate expansion and limited Grade A supply. Approximately 153,000 sq m of new office GLA is expected to be delivered, taking total stock close to 10 million sq m.
Beyond residential and offices, the outlook highlights continued support for hospitality and industrial assets, while retail performance remains shaped by structural shifts in consumer spending and e-commerce penetration.
Overall, ValuStrat’s outlook points to a market transitioning from rapid expansion toward more selective, fundamentals-led growth, with performance increasingly driven by supply composition, affordability and asset quality.
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