Off-plan transactions drove the increase in sales, while rent growth slowed to its weakest pace since 2022.
Dubai’s residential property market recorded Dh139.1 billion in sales in the first quarter of 2026, with off-plan properties continuing to drive buyer activity even as rent and price growth showed early signs of cooling.
New research from Cavendish Maxwell showed that 44,200 residential transactions were completed between January and March, a 4.6% increase compared with the same period last year. Sales value rose 21.5%, indicating that buyers continued to invest higher amounts in Dubai homes despite a slower start to the year.
Off-plan sales remained the dominant segment of the market, accounting for 73% of all residential transactions. More than 32,300 off-plan units were sold, generating a total value of Dh105.5 billion—nearly 35% higher than in the first quarter of 2025.
Developers dominate off-plan sales
Developers continued to attract the bulk of off-plan demand, supported by flexible payment plans, new project launches, and relatively lower entry prices in apartment-focused communities.
Nearly 92% of off-plan purchases in the first quarter were made directly from developers, rising to 94% in March, according to Cavendish Maxwell.
Apartments remained the most popular choice among buyers, accounting for more than 80% of transactions in both off-plan and ready segments, driven by demand from end-users and investors seeking relatively accessible price points and rental yields.
Townhouses represented 13% of off-plan sales, while villas accounted for 6.5%. In the ready market, townhouses made up 12.7% of sales, compared with a 7.1% share for villas.
Ronan Arthur, Director and Head of Residential Valuations at Cavendish Maxwell, said the year began on a strong footing for Dubai’s residential market, but conditions are now starting to shift.
“While Dubai’s residential market started the year from a strong position, mixed conditions during Q1—including geopolitical tensions, moderating transactions, slowing price growth, and a rising supply pipeline—have collectively signalled the beginning of a more balanced phase of the real estate cycle,” Arthur said.
He added that second-quarter transaction figures could show softer activity due to regional uncertainty, delays in registration data, and fewer new project launches.
“Looking ahead, we are likely to see lower transaction volumes in Q2, as the combined effects of regional uncertainty, the 60 to 90-day lag in registrations, and reduced project launches are reflected in market activity and transaction data,” he said.
“The outlook for the rest of the year will depend on how quickly conditions stabilise, the absorption of the supply pipeline, and the level of demand from end-users and investors. Opportunistic investors remain active, Dubai’s structural fundamentals remain intact, and the factors that have long supported the city’s property market appeal continue to hold strong,” Arthur added.
Dubai South leads off-plan apartments
Dubai South emerged as the leading area for off-plan apartment sales in the first quarter, recording 2,340 transactions. It was followed by Dubai Residence Complex with 1,992 sales, Jumeirah Village Circle with 1,857, Dubai Islands with 1,645, and Majan with 1,157.
Jumeirah Village Circle also topped the ready apartment segment with 1,036 sales, followed by Business Bay with 632 transactions, while Majan, Dubai Marina, and Downtown Dubai remained among the most active locations.
In the off-plan villa and townhouse segment, DAMAC Islands 2 led with 2,762 sales, followed by The Heights Country Club and Wellness, The Oasis, Grand Polo Club and Resort, and The Valley.
DAMAC Hills 2 recorded the highest number of ready villa sales at 230, followed by Dubai South, Al Furjan, The Valley, and The Springs.
Prices and rents still rising, but at a slower pace
Average residential prices reached Dh1,683 per square foot in the first quarter, reflecting a 9.6% year-on-year increase and a 0.6% rise from the previous quarter.
The annual growth rate was the slowest in three years, indicating a cooling in price momentum after a strong performance in previous cycles. However, prices remain significantly higher than in 2024, when the average stood at Dh1,493 per square foot.
Rents increased by 10.2% year on year and 0.8% quarter on quarter, marking the slowest annual rental growth since 2022. A rise in supply during late 2025 and early 2026 gave tenants more choice and greater negotiating power.
Around 149,000 rental contracts were registered in the first quarter, with renewals making up 66%. Total rental contracts fell 2.2% year on year, mainly due to a 13.6% decline in March.
Apartment rental yields averaged 7.2%, with some of the highest returns recorded in International City Phase 2, International City Phase 1, and Downtown Jebel Ali. Villa and townhouse yields averaged 5%, led by Al Barari, Dubai Industrial City, and DAMAC Hills 2.
Luxury demand remains strong
Demand for high-end properties continued to grow, with homes priced between Dh20 million and Dh50 million recording 740 transactions worth Dh28.2 billion—an increase of more than 25% year on year.
Ultra-luxury properties priced above Dh50 million generated Dh10.2 billion from 100 transactions, marking a near 79% year-on-year surge.
The combined luxury and ultra-luxury segment reached Dh38.4 billion in sales across 840 transactions, indicating that Dubai’s high-end property market remains active even as the wider market enters a more balanced phase.
Supply pipeline expands
Developers delivered 12,900 residential units in the first quarter—the highest quarterly total in three years and 23% higher than the same period last year. Apartments accounted for 8,000 of these handovers.
However, new project launches slowed significantly. Around 22,900 units across 90 projects were launched in Q1, down 57% year on year and marking the lowest quarterly figure in more than two years.
Approximately 77,500 units are expected to be delivered in 2026, with 29,600 scheduled for the second quarter. Cavendish Maxwell forecasts that actual handovers between April and June will be lower, likely ranging between 9,000 and 15,000 units.
Another 146,000 homes are in the pipeline for 2027, followed by 120,100 in 2028. While delivery timelines may shift, the report indicates that delays are more likely to push supply into later periods rather than remove it from the market entirely.
