Dubai Real Estate Market Report — August 2026

Dubai sold fewer homes in the first half of 2026 than in the first half of 2025. Prices still went up. Rents still went up. The population grew by 161,335 people in seven months.

That combination confuses people, so this report explains it with the actual numbers. Every figure below is the position as at 2 August 2026, and the source for each one is named.

The market in one table

Why you will see three different headline numbers

This is the biggest source of confusion in Dubai market reporting, so it is worth two minutes.

Three organisations measured the same six months and published three different totals. None of them is wrong. They are counting different things, and the narrower you cut the data, the worse the fall looks.

So when one headline says Dubai is near a record and another says sales fell 16%, both are true. The whole market barely moved. Homes specifically had a softer half.

For the rest of this report, “sales fell 16%” means homes only, because that is the honest number for a residential buyer.

For scale, Dubai’s full year 2025 produced AED 919 billion across 275,442 transactions, of which AED 682.5 billion was sales across 214,912 deals. On the sales measure, H1 2026 was still the second-highest first half Dubai has ever recorded, behind H1 2025.

What actually happened in the first half

The year started at full speed and then hit a short, specific shock.

Q1 2026 was a record quarter. Q2 was not. Regional tension in West Asia between February and April knocked buyer sentiment, and the second quarter came in roughly a third below the first. Betterhomes measured Q2 residential sales at AED 84.9 billion, a 31% drop, which matches the Land Department’s own quarterly split.

ANAROCK’s chief executive described it in one line worth repeating: the correction was largely sentiment-driven, not structural.

The evidence supports that reading. Prices did not fall. Rents did not fall. Buyers did not leave. Deals were postponed, not cancelled. H1 2026 residential sales were still 15% above H1 2024, which was itself a strong year.

Dubai was also not alone. In the United States, foreign buyers purchased $45.3 billion of homes in the year to March 2026, down 19.1%, and 67,100 homes, down 14%. The pause in cross-border buying was global.

Prices: up 6%, and cooling in a healthy way

The more interesting number is the shape of that growth. Price growth ran at about 12% year on year in January and eased to under 4% by May. In June the residential price index fell 1.24% month on month, the second monthly fall in a row, while still sitting 1.86% above June 2025.

That is a market slowing down, not turning down. After three years in which Dubai prices rose faster than almost any major city on earth, single-digit growth is what a stable market looks like.

Prices per square foot by community, mid-2026:

For comparison, AED 3,511 per sq ft on Palm Jumeirah is about $956. Prime Manhattan, prime London and prime Hong Kong all trade at multiples of that. Dubai’s most famous address still costs less per square foot than a mid-tier district in most gateway cities.

Rents: still climbing across almost every community

Rents are where Dubai has been quietly relentless. These are average annual asking rents for the first half of 2026.

Apartments:

Villas and townhouses:

Rent growth in the first half was positive in almost every category. Al Barari apartments rose 8.22%, Sobha Hartland 6.45%, Palm Jumeirah apartments 5.31%, Dubai South 3-bed villas 5.27%, International City 4.25% and Arjan 3.43%. Palm Jumeirah 4-bed villas rose 9.64%.

That matters more than the sales headline. Rent is the income. When sale prices pause and rents keep rising, the yield improves for the buyer coming in today.

Yields: this is Dubai’s real advantage

A 6.58% average gross yield is roughly double what London, Paris, Hong Kong, Singapore or Sydney return. It is close to the United States average, and the American figure is measured before a tax bill that a Dubai owner simply does not have.

That deserves its own table, because gross yield is where most comparisons stop and net yield is where the decision is actually made.

Dubai charges you once, at the counter, and then leaves you alone. The United States charges you every year you own it, every year you rent it out, on the day you sell it and again on the day you die. On an AED 3 million apartment yielding 6.9% gross, that difference compounds into a very large number over a ten-year hold.

Two honest caveats. A UAE company holding property pays 9% corporate tax on profit above AED 375,000, with a 0% band below that. And service charges are a real cost in Dubai, typically AED 12 to AED 30 per sq ft a year, which the gross yield figures above do not deduct.

Mortgages: Dubai borrowing is cheaper than American borrowing

EIBOR, the benchmark UAE rates are priced off, sat at 3.65% for one month and 3.91% for twelve months at the end of March 2026, and is expected to stay in a narrow band through the year.

A Dubai buyer borrowing at 3.79% against a 6.9% apartment yield earns more from the asset than the debt costs. A US buyer borrowing at 6.66% does not. That gap is the clearest single number in this report.

About 80% of Dubai purchases are still cash, so the mortgage market is an accelerator here, not the engine.

Off-plan and ready: the balance is shifting

Two things stand out.

Off-plan is the majority by number of deals and the minority by value, at 48.8%. Ready homes are worth more per unit, an average of AED 5.4 million against AED 2.4 million, because a finished Palm Jumeirah villa is a different asset from a studio in a launch tower. Across residential specifically, ANAROCK puts the off-plan share higher, at 70% to 77%.

And ready homes are coming back. June 2026 brought the largest monthly increase in ready-home transactions in three years. After several years in which almost every headline was about a new launch, buyers are increasingly choosing something they can rent out this month.

Developers noticed. Only 5,335 new residential units were launched in Q2 2026, one of the lowest quarterly launch totals in years. Supply discipline is arriving at the same time as the handover wave, which is a healthier sequence than the reverse.

Supply: the wave everyone was warning about

The 2026 figure should be read with care. Dubai has a long record of delivering fewer units than the schedule says, and most forecasters expect the final number to land below 83,000. More than 150,000 units were launched in 2025 alone, with the majority scheduled for 2028 and later.

This is the genuine risk in the market and it should be stated plainly. A lot of new stock is arriving. Set against roughly 200,000 new residents expected this year, at an average household size of about three people, that is around 66,000 new households against up to 83,000 new homes.

For the first time in several years, supply may run slightly ahead of household formation. That is exactly why price growth cooled from 12% to under 4% across the half. It is not a 2009-style oversupply, the gap is modest and the delivery forecast historically overstates, but it is the reason to plan for single-digit price growth rather than double.

Population: the number that explains everything else

Dubai’s 7.5% population growth in 2025 was among the highest ever recorded for the emirate, and the only stronger year on record is 1980.

Dubai also reports a daytime population of about 6.39 million, which includes roughly 1.81 million commuters, tourists and visitors on top of residents. That figure is what actually uses the shops, offices, schools and restaurants, and it is the number retail and hospitality investors care about.

Rents kept rising through a record handover year because people kept arriving faster than the cranes could keep up.

Who is buying

In Q1 2026 alone, 48,448 investors transacted, up 8%, of whom 29,312 were buying in Dubai for the first time, up 14%. Foreign investment reached AED 148.35 billion in the quarter, up 26%. GCC nationals invested AED 12.23 billion across 3,228 transactions.

Why they buy, by their own account: 38% for personal use, 28% for rental income, 21% to qualify for the Golden Visa and 13% for capital preservation.

That last category is the quiet story of 2026. Dubai is increasingly bought as a place to keep money, not only as a place to earn a yield.

Luxury and branded residences

The luxury end grew while the mainstream market paused. That is the opposite of what happens in a weak market, and it is the strongest single argument against the “Dubai is correcting” reading.

Branded residences are now a category of their own: 64 completed projects, 87 under development, and an average price premium of about 64% over comparable unbranded stock.

Offices: the number nobody expected

Off-plan office sales in the first half of 2026 reached AED 13.1 billion across 1,668 deals.

For context, the whole period from 2019 to 2025 produced AED 5.48 billion across 1,821 deals.

Six months of 2026 produced almost two and a half times the value of the previous seven years combined, on fewer transactions. Dubai’s office market has gone from an afterthought to one of the tightest commercial markets in the region, driven by companies relocating headquarters rather than by investors.

The most recent data we have

Median sale prices and deal counts from Dubai Land Department open data, for July 2026 up to the 13th:

In the single week of 6 to 10 July 2026, Dubai recorded AED 15.6 billion in real estate transactions.

Dubai South is taking a large share of July’s volume at a low median price, which pulls the citywide average down without a single individual property falling in value. This is a good example of why any “Dubai average price” figure has to be read carefully.

What we expect for the rest of 2026

We are a brokerage, not a forecaster, and the honest answer is that nobody knows. What the data supports:

ANAROCK projects a 4% to 7% price increase across 2026, with renewed regional conflict named as the main downside risk. That is consistent with what we see: single-digit price growth, continued rent growth, and volume recovering as the second-quarter sentiment shock fades.

The three things worth watching between now and December are the pace of handovers against the 83,000 forecast, whether ready-home demand keeps growing at June’s rate, and whether EIBOR stays in its current band.

The takeaway

Dubai in August 2026 is a market where sales volumes normalised from an extraordinary peak and almost everything that matters to an owner improved.

Prices are up 6%. Rents are up across nearly every community. Yields are 6.58% gross, and tax-free in an individual’s hands. Borrowing costs 3.79% against a 6.9% apartment yield. The population added 161,335 people in seven months. The luxury segment grew 16%. Offices had their best half-year ever.

A 16% fall in residential sales value after 2025’s record is the least important number on this page.

Common questions

Did Dubai property prices fall in 2026?

No. The average price rose from AED 1,800 per square foot in H1 2025 to AED 1,900 in H1 2026, a 6% increase. What fell was the number and value of residential sales, down about 16% against a record H1 2025. Prices and volumes are separate measures and they moved in opposite directions.

Why did sales fall if the market is strong?

Regional tension in West Asia between February and April 2026 caused a short, sentiment-driven pause. Buyers postponed rather than withdrew. H1 2026 residential sales were still 15% above H1 2024, and Q1 2026 was a record quarter, up 31% in value.

What rental yield can I expect in Dubai in 2026?

The average gross yield across all residential property was 6.58% in July 2026. Apartments average 6.9%, townhouses 5.1% and villas 4.5%. These are gross figures before service charges, and unlike most markets there is no income tax to deduct for an individual owner.

Is Dubai oversupplied?

Around 83,000 units are scheduled for handover in 2026, though the historical pattern suggests the real figure will be lower. Against that, Dubai’s population grew by 161,335 in the first seven months of 2026 alone and is expected to add 175,000 to 225,000 across the year, which is roughly 66,000 new households. Supply may run slightly ahead of demand for the first time in several years, which is why price growth cooled through the half. It is a slowdown in growth, not a shortage of buyers.

What taxes do I pay on Dubai property?

For an individual owner, none on an annual basis. There is no property tax, no income tax on rent, no capital gains tax and no inheritance tax. The main cost is the 4% Dubai Land Department transfer fee at purchase. Tenants pay a 5% municipality housing fee on their annual rent. A company holding property pays 9% UAE corporate tax on profit above AED 375,000.

Is off-plan still the better buy in 2026?

Off-plan was 68.4% of all sales by number in H1 2026 but only 48.8% by value, and 70% to 77% of residential sales specifically. Ready homes saw their largest monthly increase in three years in June 2026. With up to 83,000 handovers landing and only 5,335 new units launched in Q2, the case for ready stock is stronger now than at any point since 2022. Which is right depends on whether you need income now or growth later.

Who is buying property in Dubai?

Indian buyers lead at 22%, followed by British at 17% and Chinese at 14%, on 2025 figures. Roughly 80% of purchases are cash. In Q1 2026, 29,312 people bought in Dubai for the first time, up 14% year on year.

How does Dubai compare to the US market right now?

Dubai yields 6.58% gross against about 6.7% in the United States, so the headline is close. The difference is what you keep. A Dubai owner pays no annual property tax, no income tax on rent, no capital gains tax and no estate tax. A US owner pays roughly 0.89% of value every year, up to 30% on gross rent, up to 20% on the gain, and faces a $60,000 estate tax exemption as a non-resident. Dubai borrowing is also cheaper, at about 3.79% against 6.66%.

Cresco Real Estate is a licensed Dubai brokerage. This report is market information, not investment, tax or legal advice. Every figure is the position as we understood it on 2 August 2026, and market data is revised over time. Sources are named against each figure throughout.

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