UAE Residential Property Market Shows Divergent Trends in Q1

The UAE's residential property market demonstrated resilience during the first quarter of 2026 despite a slowdown in transaction activity and moderating price growth. Market activity recovered after an initial decline caused by regional geopolitical tensions, with transaction levels stabilising as confidence gradually returned.

Weekly transaction values in Dubai briefly dropped by nearly 50% during the peak of the disruption before recovering later in the quarter.

Dubai Sees Divergence Between Off-Plan and Secondary Markets

A clear contrast emerged within Dubai's residential market. Off-plan sales increased by 9.5% during the first quarter, reflecting continued investor interest in new developments.

At the same time, secondary market transactions declined by 8.2%, indicating a more cautious approach among buyers in the resale segment.

The differing performance between the two segments highlighted changing buyer preferences and market sentiment during the quarter.

Abu Dhabi Records Strong Launch-Led Activity

Abu Dhabi also experienced mixed market conditions. New project launches helped transaction volumes more than double compared with the same period last year.

However, activity moderated towards the end of the quarter, with monthly transaction levels softening despite the strong year-on-year performance.

Price Growth Continues at a Slower Pace

Residential property prices continued to rise across Dubai, although growth moderated compared with previous periods.

Annual residential price growth ranged between 8% and 12%, lower than the double-digit highs of up to 19% recorded earlier. The moderation reflected a gradual adjustment in the market and a move towards more sustainable pricing levels.

Rental Market Reflects Demand for Flexibility

Rental trends in both Dubai and Abu Dhabi showed a growing preference among tenants for flexibility. Shorter-term leasing arrangements became increasingly common as occupiers adjusted to changing market conditions.

In Abu Dhabi, new rental contracts increased by 13.4% even though overall rental registrations declined. This indicated that tenants were relocating within the market rather than exiting it.

Developers Introduce Targeted Incentives

Developers responded to softer demand in certain segments by offering incentives such as discounts and more flexible payment plans. These measures were primarily directed towards specific inventory rather than representing a broad market-wide price correction.

Supply Pipeline Remains Strong

The residential sector is expected to see significant new supply over the coming years. Around 59,000 residential units are forecast to be delivered across the UAE during 2026, while an even larger volume is anticipated in 2027.

• Dubai off-plan sales increased by 9.5%.
• Dubai secondary transactions declined by 8.2%.
• Dubai residential prices rose between 8% and 12% annually.
• Abu Dhabi new rental contracts increased by 13.4%.
• Approximately 59,000 homes are expected to be delivered in 2026.

The market is entering a phase of adjustment rather than decline, supported by continued demand from investors and end-users despite ongoing regional uncertainties.

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