Activity in the Dubai real estate market has noticeably decreased. Over the period from December 2025 to May 2026, the total value of transactions fell by 55%, while sales of finished facilities decreased by 49%, and transactions at the construction stage (off-plan) by 58%. In the second quarter of 2026, the total number of transactions was 29% less than a year ago (just under 37,000 versus 51,000), and their total value was 88 billion dirhams compared to 154 billion a year earlier.
At the same time, prices remain surprisingly stable. According to UBP, the cost per square meter in Dubai has decreased by only 10% since the beginning of the year, with prices for finished housing almost unchanged (minus 2.4%), while the main correction affected facilities under construction (minus 10.8%). In the CBRE report, the situation looks even more positive: sales prices are still 1.9% higher than a year ago, indicating real growth even in a more subdued market.
The rental market also remains calm. New contracts fell by 4.8% after peaking in February, but when extending existing contracts, tenants, on the contrary, faced an increase of 3.1% due to the protective mechanisms of the regulator. The exception was DIFC (Dubai International Financial Centre), where there are no citywide restrictions on rental growth, where the drop since February was 16.4%. In general, the average rental in Dubai decreased by 2.6% year-on-year, which analysts call a mild cooling after years of growth.
Experts cite the war between the United States and Iran as the main reason for the current dynamics, which interrupted the record growth in real estate prices in Dubai. Since expats make up about 90% of the emirate's population, analysts expect the situation to clear up by the fall. As UBP noted, "the full impact of the conflict will become more noticeable after the summer," when the start of the school year will provide a clearer picture of demand. At the same time, they emphasize that price stability indicates a "more mature market supported by the economy ... than in previous years."The offer does not create excessive pressure yet. Although about 350,000 new units are expected to be commissioned by 2030, historically no more than half of this volume has been completed on time. In the first half of 2026, about 18,000 facilities were completed, and they were successfully absorbed by the market.
The contrast with the figures for Dubai is Abu Dhabi, where house prices increased by 21.6% over the year, and the volume of transactions reached 32 billion dirhams, an increase of 150%.As a result, both reports agree that the current slowdown reflects buyer caution rather than a systemic crisis.
Source: Khaleej Times
