Dubai’s real estate market is expected to move into a more normalised phase in 2026, with residential price growth moderating after several years of rapid appreciation, while the office sector remains a clear outperformer, 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 as affordability constraints and fewer new off-plan launches begin to shape demand. In its base case, residential rents are expected to remain broadly flat, signalling a softer leasing cycle following sharp rental growth in recent years.
Performance within the residential sector 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 reflects Dubai’s supply composition, 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 cautions that delivery schedules are frequently revised, meaning realised supply may fall below headline estimates, with transaction volumes also expected to cool.
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. Around 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, ValuStrat’s outlook highlights continued support for hospitality and industrial assets, while retail performance remains shaped by structural shifts in consumer behaviour and ongoing e-commerce penetration.
Overall, the outlook points to a market transitioning from momentum-driven growth toward more selective, fundamentals-led performance in 2026
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21 Jan 2026
