Dubai’s luxury property segment set new records in sales and rentals, while the broader market experienced a softer first half.
As Dubai’s property market heads into the second half of 2026, two trends stand out for buyers and investors: the luxury housing and rental segments remain on a record-setting trajectory, while the wider residential market shows signs of normalization after last year’s rapid growth.
Dubai’s high-end property market remains the key growth driver, with 296 homes sold for more than $10 million in H1 2026. Knight Frank reported that the combined value of these transactions reached $5.1 billion, marking a 14% annual increase.
Sales of homes valued above $10 million rose 16% compared with the first half of 2025 and surged 49% from H1 2024, reflecting sustained demand from international high-net-worth buyers seeking exposure to Dubai’s prime property market.
Knight Frank reported that Q1 2026 saw 165 ultra-luxury home sales, while Q2 recorded 131 deals. The period also marked a record for the market, with 26 transactions valued above $25 million.
Super-prime properties continue to drive Dubai’s luxury market
Dubai’s ultra-luxury segment remained the strongest performer in H1 2026, with Dubai Hills Estate leading the market after recording 51 home sales above $10 million. Palm Jumeirah followed closely with 50 transactions, while Palm Jebel Ali secured 40 luxury deals ahead of its planned completion in 2028.
The most valuable transaction during the first half involved a six-bedroom apartment at Aman Residences in Jumeirah Second, developed by H&H Investment and Development, which was sold for $114.9 million (Dh422 million).
Faisal Durrani, Partner and Head of Research, MENA at Knight Frank, said Dubai’s luxury property sector has “consistently broken records over the last five years.” He noted that many of the recently recorded transactions were agreed before the latest regional tensions but were officially registered later due to the typical four-to-six-week processing period.
Durrani added that market momentum has remained resilient, supported by Dubai’s long-term advantages, including world-class infrastructure, international connectivity, a business-friendly environment, lifestyle appeal, and strong education and healthcare offerings.
“Dubai’s luxury market has consistently broken records over the past five years. Given the current regional uncertainty, this latest milestone largely reflects transactions that were agreed before the conflict but were officially registered later due to the typical four-to-six-week registration delay,” said Faisal Durrani, Partner and Head of Research (MENA) at Knight Frank.
Broader market moderates after 2025 highs
While Dubai’s overall residential market remains active, growth has moderated compared with last year’s peak levels. Cavendish Maxwell reported that residential sales reached Dh221.3 billion across nearly 79,200 transactions in the first half of 2026.
Overall H1 residential transaction volumes were around 14% lower than the same period in 2025, while total sales value declined by 15.7%.
However, market momentum improved in June following a slower May. Cavendish Maxwell recorded nearly 12,315 residential transactions worth Dh25.17 billion in June, compared with approximately 9,500 purchases valued at Dh22 billion in May.
Ronan Arthur, Director and Head of Residential Valuation at Cavendish Maxwell, said the market recovery followed a slower May, which was partly impacted by the Eid holiday. Residential transactions increased by nearly 30% month on month in June, with some of the growth attributed to deals that had been delayed from the previous month. However, the rebound also reflected continued investor confidence despite ongoing regional uncertainty.
Off-plan properties remained the main driver of June’s activity, accounting for 9,442 transactions, or 76% of total residential sales. The value of off-plan deals climbed to Dh17.6 billion, compared with Dh15.2 billion in May.
A separate analysis by fäm Properties, based on open data from DXBinteract, showed an even stronger performance across the wider market. The report recorded 13,933 sales transactions worth Dh33.2 billion in June, highlighting a strong return of activity following the May slowdown.
June’s performance marked a 35.5% month-on-month increase in transaction volumes and a 14.9% rise in sales value. The second quarter ended with 38,157 property deals worth Dh110.2 billion, bringing first-half 2026 activity to 86,077 transactions valued at Dh286.2 billion.
Primary market sales continued to outperform resale transactions in June, with 10,398 new property deals worth Dh21.6 billion compared with 3,535 secondary-market transactions valued at Dh11.6 billion.
Villa sales recorded strong growth, rising 46.5% month on month to 1,474 transactions worth Dh7.5 billion. Apartment sales also increased, climbing 32.3% to 11,605 deals valued at Dh17.8 billion. The commercial property segment gained momentum as well, with office and retail units recording 478 transactions worth Dh2.3 billion.
Firas Al Msaddi, CEO of fäm Properties, said buyers and tenants were demonstrating increasing confidence across the rental, sales, and individual property segments, reflecting continued strength in Dubai’s real estate market.
Dubai South continues its upward momentum
Dubai South maintained its strong market performance for the fourth consecutive month, emerging as the top-performing area in June with 2,869 transactions valued at Dh3.3 billion, according to fäm Properties.
The area recorded a 111% month-on-month increase in transaction volumes and a 106% rise in total value. It has also remained among Dubai’s top five performing locations for eight consecutive months, driven largely by strong demand for developer-led off-plan projects.
Firas Al Msaddi, CEO of fäm Properties, said the sustained performance of Dubai South is helping transform it from an emerging location into an established destination in buyers’ perceptions. He added that this trend signals positive long-term prospects for the wider property market.
Other areas recording strong activity in June included Jebel Ali First, Al Barsha South Fourth, Wadi Al Safa 5, and Al Thanya Fifth.
Dubai rental market reaches record levels
Dubai’s rental sector achieved a new milestone in June, with fäm Properties reporting 40,022 registered rental contracts during the month — the highest monthly figure on record.
New tenancy agreements increased 48.6% year on year to 19,245, while renewed contracts rose 28.5% to 20,777. The figures indicate continued demand from new residents entering the market, alongside existing tenants opting to extend their stays.
According to Rently, Dubai recorded Dh32.2 billion in rental contract value across 253,992 new and renewed leases during the first quarter of 2026. Rental cancellations fell by 25%, suggesting greater stability and confidence within the market.
Rently’s user data also showed that more than 56% of tenants on the platform are renting properties priced between Dh50,000 and Dh100,000 annually. The median annual rent stood at Dh72,000, while the average reached Dh92,000, highlighting strong demand for flexible payment options within the mid-market rental segment.
“Rent has traditionally been one of the few major household expenses that has not adapted to the way people manage their finances today. We are now seeing more customers opt for payment structures that align with monthly incomes and modern budgeting preferences,” said Taimur Khan, Head of UAE at Rently.
Market shows greater resilience than previous cycles
Knight Frank noted that Dubai’s current property cycle differs from earlier downturns due to the growing presence of end-users in the market. Faisal Durrani said that 25% of properties were resold within 12 months of purchase in 2008, compared with just 4% last year, pointing to a significant decline in speculative activity.
This shift has supported greater price stability in completed communities, particularly villa-focused neighbourhoods, even amid recent regional uncertainty.
Price adjustments continue
While the market remains resilient, Knight Frank said prices in Dubai’s mainstream residential sector have declined by between 5% and 20%, depending on the location. The adjustment has been driven partly by some owners and investors choosing to exit, including motivated sellers who may still be securing gains after the strong price growth recorded over the past five and a half years.
Nicholas Spencer, Partner and Head of Residential, MENA at Knight Frank, said the broader impact of the regional conflict may not be fully visible until the autumn, provided market conditions remain stable.
As Dubai enters the traditionally quieter summer period, transaction activity could ease further in the coming months. However, first-half 2026 figures indicate that the property market continues to draw support from strong off-plan demand and record-breaking rental activity.
