ValuStrat’s Dubai Real Estate Outlook 2026 forecasts residential capital gains of around 10% in 2026, down from 19.8% in 2025, as the market transitions into a more normalised phase following several years of rapid appreciation. In ValuStrat’s base case, residential rents are expected to be broadly flat, reflecting a cooling leasing cycle and tighter affordability dynamics.

In contrast, office capital values and rents are both projected to rise by around 15%, supported by corporate expansions and limited Grade A supply in prime locations.

Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, said:

“Dubai’s underlying demand drivers remain intact into 2026, but performance is likely to become more segmented.

Our base case assumes slower overall residential price growth, with villas continuing to outperform apartments due to supply composition and lifestyle demand. In offices, the imbalance between prime demand and new supply remains the core support for continued rental and capital value growth.”

Residential: continued gains, but at a slower pace

ValuStrat expects residential prices to continue rising in 2026, with a widening performance gap between villas and apartments. Villas and townhouses are forecast to increase by 17.7%, while apartments are forecast to rise by 7.4%. Demand is expected to remain strongest for single-family homes, which account for less than 20% of Dubai’s total residential stock, while the development pipeline remains heavily skewed toward apartments.

The residential supply pipeline for 2026 is forecast at 131,234 units, comprising approximately 81% apartments and 19% villas and townhouses. ValuStrat notes that annual delivery forecasts have historically been revised due to construction timelines, which may affect realised supply in 2026. ValuStrat also anticipates transaction volumes to cool in 2026, in part reflecting a slower cadence of new off-plan project launches relative to prior periods.

Rentals: base case of stabilisation

In ValuStrat’s base case, residential rental growth is expected to be broadly flat (0%) in 2026. The outlook notes that leasing markets are increasingly shaped by affordability constraints, changing tenant preferences, and the interaction between new supply and household formation.

Offices: demand remains elevated as prime supply stays tight

Dubai’s office market is expected to remain supply-constrained in prime submarkets, supporting continued growth in both capital values and rents. ValuStrat forecasts ~15% growth in office capital values and rents in 2026, moderating from 2025 levels. Based on developer estimates, 153,122 sq m (1.65 million sq ft) of office GLA is expected to be delivered in 2026, bringing Dubai’s total office stock to 9.94 million sq m (107 million sq ft).

Broader outlook: hospitality and industrial sectors are supported by economic activity; retail continues to adjust The outlook highlights continued support for hospitality performance given Dubai’s positioning as a global tourism and events hub. In the industrial sector, demand is expected to outpace supply, supporting price growth. Retail performance continues to be shaped by structural shifts in consumer spending and e-commerce penetration.

About VPI:

The ValuStrat Price Index (VPI) regularly marks to market a sample of properties that represent more than 90% of the Dubai residential and commercial markets and is built by our expert RICS Registered Valuers.

To learn more about ValuStrat's real estate research outputs, please visit ValuStrat's Insights Webpage.

About ValuStrat:

ValuStrat is an international consulting group providing Advisory, Valuations, Research, Transaction Advisory, Due Diligence, and Industrial Consulting across multiple sectors. With 45+ years of experience, a network of 17 offices in five countries, and a client base of 1,000+ organisations, ValuStrat supports governments, financial institutions, corporates, and SMEs.

The firm is one of the oldest valuation practices in the Middle East, a preferred provider to 120+ financial institutions in EMEA. It is ranked in the top category by the Dubai Land Department (DLD) and the Real Estate Regulatory Authority (RERA). Its consulting services in Strategy, M&A, Real Estate, and Banking have been recognised by Consultancy ME for two consecutive years.

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