The real estate market of the United Arab Emirates experienced a stage of structural normalisation during the second quarter of 2026 as it started shifting its focus from rapid price increases after the pandemic towards sustainable operation in the long term.
As stressed by industry experts, despite the fact that all the fundamentals of the market remained solid in all urban centres, the growth rate naturally slowed down due to the expanding supply pipelines and changing behaviour of tenants, as well as regulatory policies aimed at improving housing affordability in the long run.
Specifically, in Dubai, the prices for villa and apartment sales experienced a slight quarter-to-quarter correction of about 3 per cent in June.
The leasing environment demonstrated similar stabilisation: average apartment rental rates contracted by 4 per cent quarterly, while villa leases adjusted downward by 2 per cent. Total lease contract completions slowed as expanded housing handovers empowered long-term tenants to convert into first-time property owners. Property developers delivered nearly 11,650 new residential units—comprising roughly 9,200 apartments and 2,450 villas—during the quarter, with tens of thousands of additional residential units scheduled for completion before the end of the year.
Abu Dhabi displayed parallel trends, maintaining steady underlying performance while showing signs of quarterly stabilisation. Freehold residential capital values registered a measured 2.1 cent quarter-on-quarter increase, bringing annual price growth to 17.8 per cent. Apartment capital values outstripped villas, recording a 24.1 per cent annual increase compared to 12 per cent for landed properties. To curb speculative pressure on household incomes and maintain regional competitiveness, regulatory authorities implemented a temporary zero per cent rent cap across residential and commercial leases in June 2026, anchoring rental stability across established neighbourhoods.
Conversely, commercial property sectors across both metropolitan centres countered the residential slowdown, driven by acute supply constraints for high-tier corporate accommodation. In primary financial hubs—including the Abu Dhabi Global Market on Al Maryah Island and Dubai’s prime commercial districts—Grade A office space maintained near-full occupancy levels alongside double-digit annual rental appreciation. Industry experts note that ongoing sovereign infrastructure investments, flexible residency framework updates, and sustained corporate relocations continue to provide an enduring structural floor for the nation’s broader real estate ecosystem.
