Dubai property prices are forecast to rise by 10% in 2026, signaling a shift to a more normalized phase of growth after record highs. According to ValuStrat’s latest outlook, the office sector is poised to be the top performer, with capital values and rents projected to grow by 15%, significantly outpacing the residential market.
Residential Market Forecast: Moderating Growth
The residential market is transitioning to a phase of steadier, more sustainable growth, with a clear divergence between property types.
2026 Residential Price Forecast (ValuStrat):
| Segment | 2026 Forecast | 2025 Performance | Trend |
|---|---|---|---|
| Overall Market | ↗️ ~10% | ↗️ 19.8% | Moderating |
| Villas & Townhouses | ↗️ 17.7% | – | Outperforming |
| Apartments | ↗️ 7.4% | – | Slower growth |
| Residential Rents | ~ 0% (Flat) | – | Stabilizing |
Key Market Dynamics:
- Supply Pipeline: 131,234 units expected in 2026 (81% apartments, 19% villas).
- Demand Driver: Villas benefit from chronic undersupply and strong lifestyle demand.
- Rental Market: Affordability and increased choice are expected to flatten rental growth.
Office Market Forecast: Strong Growth Continues
The office sector remains a standout due to a fundamental supply-demand imbalance in prime areas.
2026 Office Market Forecast:
- Capital Values: ↗️ ~15%
- Prime Rents: ↗️ ~15%
Supporting Factors:
- Supply Constraint: Only 153,122 sqm of new office space is forecast for 2026.
- Strong Demand: Ongoing corporate expansion and the Regional Headquarters (RHQ) program drive occupancy.
- Prime Shortage: Severe shortage of Grade A space in core locations sustains growth.
Broader Market Outlook & Expert Insight
The 2026 outlook highlights a market becoming more segmented, with performance varying sharply across sectors.
Haider Tuaima, Head of Real Estate Research at ValuStrat:
“Dubai’s underlying demand drivers remain intact into 2026, but performance is likely to become more segmented… In offices, the imbalance between prime demand and new supply remains the core support for continued growth.”
Other Sector Outlooks:
- Hospitality: Remains strong, supported by Dubai’s global tourism appeal.
- Industrial: Demand continues to outpace supply, supporting price growth.
- Retail: Performance is mixed, adapting to e-commerce and shifting consumer habits.
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Source: ValuStrat Dubai Real Estate Outlook 2026.
