UAE Residential Market Outlook for 2026

Analysts predict that residential prices and rents in the UAE will experience slower growth in 2026 compared to earlier years. A significant influx of new supply is expected to impact the market dynamics. Anton Lopatin, a senior director at Fitch Ratings, indicated that approximately 120,000 new units will be handed over in Dubai during that year, which may exert downward pressure on both prices and rents.

Market Supply and Demand Dynamics

Although the anticipated supply is noteworthy, it doesn’t account for potential delays in the handover process. Lopatin stated that residential price and rent growth in the UAE is likely to moderate further in 2026, with a potential correction due to an increasing imbalance between supply and demand, particularly in Dubai. Current trends already show that growth in both prices and rents is waning; for instance, in November, prices only grew by 13% year-on-year, down from an 18% increase in January.

Trends in Dubai’s Residential Market

Rent growth has also slowed, dipping to around 6% year-on-year by November compared to 14% at the beginning of the year. This market shift signifies a transition to a more balanced phase after several years of extraordinary growth, as observed by Prathyusha Gurrapu, head of research at Cushman & Wakefield Core. Expectations for 2026 indicate a moderation in price appreciation, ranging between 5% to 8%, a substantial decrease from the 12% to 22% growth noted in the previous two years.

Abu Dhabi Market Forecast

Conversely, the property market in Abu Dhabi is anticipated to remain tight due to high demand amid limited supply. Gurrapu highlighted that residential prices in the emirate have surged by about 30% year-on-year by December, alongside a 23% increase in rents. With around 6,500 new residential units expected to be delivered in 2026, conditions in Abu Dhabi will likely support further price and rental growth of 8% to 12% during that year.

Economic Factors Affecting Growth

High-net-worth individuals continue to relocate to the UAE, enhancing demand and driving prices higher. The influx of about 7,200 millionaires in 2025 underscores the appeal of the region as a promising economic hub. As the UAE sees strong population growth, particularly in Dubai and Abu Dhabi, the residential markets will evolve, shaped by these demographic shifts and economic reforms aimed at sustaining long-term growth.