Dubai’s residential market took its first real breather in years during the second quarter of 2026, according to betterhomes’ Q2 2026 Dubai Residential Market Report.
Transactions fell 31% year-on-year, worth a combined AED84.9 billion, as regional tension and the Eid Al Adha holiday slowed activity through May. Yet the pullback was short-lived: monthly transactions jumped 28% from May to June, and the quarter still ranked as the third-highest second quarter on record, behind only 2024 and 2025.
Prices told a different story to volumes. Price per square foot rose across the majority of tracked communities even as deal counts fell, with prime villa communities such as Palm Jumeirah Garden Homes (+37% year-on-year) and Jumeirah Islands (+20%) leading gains.
“The second quarter provided greater clarity on Dubai’s residential market. Regional tensions understandably caused some buyers to pause, delaying decisions rather than changing them, and activity recovered quickly as conditions stabilised. Perhaps the most encouraging aspect of the quarter was the resilience of pricing: we saw little evidence of distressed selling, and owners remained confident enough in Dubai’s long-term prospects to hold their assets rather than compromise on value. June also recorded the highest number of tenancy contracts ever signed in Dubai, which reflects real confidence in Dubai as a place to live, work and invest.”
— Richard Waind, CEO, betterhomes
Off-plan holds up a cooling market as secondary buyers pause
Off-plan developments accounted for 76% of all residential transactions in Q2, with 26,338 sales; a 12% annual decline that stands in sharp contrast to the secondary market’s 59% collapse to 8,512 deals. Off-plan transaction value fell just 15% year-on-year, versus a 69% drop in secondary value, leaving new-build developers responsible for the majority of capital deployed in the quarter. Across DLD transactions, apartments averaged AED1.79 million, townhouses AED3.65 million and villas AED13.77 million, with the overall average sale price down 5.9% quarter-on-quarter but still 3.2% higher than Q2 2025.
Buyer enquiries fall 33%, but cash deals hit 61% as 74,100 homes head to market
Buyer enquiries fell 33% year-on-year and 23% quarter-on-quarter, as per the betterhomes Q2 2026 report, with apartment enquiries down a sharper 41% against a comparatively resilient 34% decline for villas and townhouses. Buyers who stayed active increasingly did so without financing: cash purchases made up 61% of betterhomes deals in Q2. The next wave of supply remains substantial, with roughly 74,100 homes due to complete across Dubai in 2026, rising to a peak of 160,700 units in 2027, concentrated overwhelmingly in apartments, keeping villa and townhouse stock comparatively scarce.
Luxury cools to 578 deals, yet off-plan prime sales climb 27%
Dubai’s luxury market adjusted alongside the wider slowdown, with transactions above AED15 million falling 59% year-on-year to 578 deals, a pullback from an exceptional prior-year high rather than a loss of appetite. Off-plan luxury sales bucked the trend entirely, rising 27% year-on-year, as buyers continued to commit to new landmark developments in locations such as The Oasis, Dubai Hills Estate and Palm Jebel Ali even as secondary prime activity slowed.
Tenant enquiries surge 20% as rents keep climbing despite a supply surge
Leasing was the clearest counterpoint to the sales market. Tenant enquiries rose 20% year-on-year and 18% quarter-on-quarter, climbing more than 60% between April and June alone, as would-be buyers stayed in the rental market and existing residents traded up. Average rents stayed 3.1% higher than Q2 2025, with villa rents up 5.7% year-on-year to AED281,633, even as available supply rose by 70–100% in some communities.
“One of the defining features of the leasing market in Q2 was its resilience. Tenant enquiries were up 20% year-on-year and 18% quarter-on-quarter, as more people held off buying and stayed in the rental market instead. With more stock on the market, tenants have real choice now, and that’s putting pressure on new rents. The properties that are priced right and presented well are still leasing fast; the ones that aren’t are taking longer.”
