Dubai’s residential market shifted into a more measured phase during Q2 2026, with transaction activity moderating following several years of exceptional growth. According to Savills Dubai Residential Market in Minutes Q2 2026, total residential transactions reached 35,884 in Q2, representing a 19% Q-o-Q decline, as buyers became increasingly selective amid rising supply, greater housing choice and a more cautious investment environment.
Despite the slowdown in overall activity, the market’s underlying fundamentals remain robust. Long-term confidence continues to be supported by infrastructure investment—the latest being the approval of Dubai’s AED 34 billion Metro Gold Line—favourable residency reforms, and the emirate’s enduring appeal as a global investment and lifestyle destination.
Transaction Activity Normalises Following Record Run
While transaction volumes softened compared to the exceptionally strong levels recorded in previous quarters, the market remained active, with the off-plan segment accounting for 76% of all residential transactions. Ready market activity experienced a more pronounced slowdown, with transactions declining by approximately 30% quarter-on-quarter. Meanwhile secondary market transactions fell by around 29%, compared to a 16% decline in the primary market.
Savills notes that market volumes have largely stabilised since March at approximately 2,800 ready-market transactions per month, suggesting the pace of adjustment may already be beginning to moderate. Refinancing activity has also increased significantly, accounting for around 70% of valuation instructions by the end of Q2, compared to historical levels closer to 30%. This highlights continued owner confidence in the long-term market outlook, with many existing owners choosing to optimise financing arrangements rather than dispose of assets.
Supply Pipeline Expands as Deliveries Reach Multi-Year High
One of the most significant developments during the quarter was the sharp increase in residential completions. Approximately 27,300 homes were handed over during Q2 2026, representing the highest quarterly delivery volume in recent years. Apartments accounted for around 17,400 units, while 9,900 villas and townhouses were completed, significantly increasing the availability of ready family housing across the city.
Conversely, developers adopted a more measured approach to new launches during the quarter, introducing approximately 5,335 residential units, compared with more than 45,000 units launched in Q1 2026. Developers are increasingly phasing releases and extending delivery timelines from roughly three years to four years, helping distribute future supply over a longer period and reducing near-term absorption pressure.
Andrew Cummings, Head of Residential Agency, commented: “Following several years of exceptional growth, Dubai’s residential market is entering a more balanced phase. What we’re seeing is not a broad-based correction but rather a normalisation of activity as the market adjusts to higher levels of available stock and buyers become more selective. Demand remains present, particularly for well-located, high-quality homes and established communities, but purchasers now have greater choice and are taking more time to make decisions. We expect performance to become increasingly localised over the coming quarters. Communities with significant volumes of new supply may experience further pricing adjustments, while supply-constrained and best-in-class locations should continue to demonstrate resilience.”
Pricing Performance Becomes More Localised
Price growth moderated during Q2 as a growing number of completed units entered the market. Average apartment prices stood at AED 1,960 per sq ft, down around 4% quarter-on-quarter, while villa and townhouse values eased marginally to AED 1,646 per sq ft, a decline of approximately 0.8% from Q1 levels.
Savills’ analysis of more than 500 like-for-like transactions indicates underlying pricing adjustments of approximately 5–7% during the quarter, with selected locations recording declines of up to 10%. Communities such as Dubai Hills Estate and Arabian Ranches 3 experienced greater pricing pressure, while more supply-constrained locations including Reem Mira remained comparatively resilient. Despite the quarterly moderation, prices remain above year-ago levels.
Rental Market Moves Towards Rebalancing
Dubai’s leasing market also entered a period of rebalancing during Q2. Annual Ejari registrations declined by approximately 22% Q-o-Q, while rental rates across major residential communities fell by an average of 8–10%. The moderation reflects increasing residential supply, greater tenant choice and growing competition from serviced apartments and short-term rentals, resulting in a more competitive environment for landlords.
Prime Market Remains Resilient
The prime residential segment also moderated, with transactions above AED 10 million declining by 54% Q-o-Q to 864 transactions. However, activity remained concentrated in Dubai’s most established luxury destinations, including Palm Jumeirah, Dubai Hills Estate and Jumeirah Golf Estates. The quarter also witnessed several notable ultra-prime transactions, including a record AED 280 million villa sale on Jumeirah Bay Island, reinforcing continued demand for waterfront trophy assets and premium branded residences at the top end of the market.
Outlook
Looking ahead, Savills expects Dubai’s residential market to continue transitioning towards a more sustainable phase characterised by moderating transaction volumes, elevated handover activity and increasingly selective buyer behaviour. While pricing performance is expected to become more localised, the city’s structural demand drivers—including inward migration, infrastructure investment and ongoing residency reforms—remain supportive of long-term growth.
With developers extending delivery timelines, launch activity moderating and supply absorption continuing, market conditions are expected to remain balanced over the medium term. Prime and well-located assets are likely to outperform, while apartment-led communities with higher concentrations of new supply may see further pricing differentiation and softer rental growth.
