Dubai’s residential property market showed further signs of cooling in the second quarter of 2026, with both sale prices and rents declining as new supply entered the market and buyer activity slowed after several years of rapid growth.
According to Cushman & Wakefield Core, city-wide residential sale prices fell 4 per cent quarter-on-quarter, while average rents dropped 6 per cent over the same period as the market shifted towards a more balanced phase.
The consultancy said price corrections were becoming increasingly evident across most apartment and villa submarkets following five years of exceptional growth. It expects further moderation as transaction volumes remain subdued, buyer and seller expectations continue to diverge, and additional housing supply comes to market. However, established end-user communities are expected to remain relatively resilient, supported by underlying demand.
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Apartment prices recorded some of the steepest quarterly declines, led by Palm Jumeirah (down 9 per cent), Downtown Dubai (7 per cent) and Business Bay (7 per cent), while Dubai Hills Estate (down 4 per cent) and Jumeirah Village Circle (3 per cent) proved more resilient. Villa performance was mixed, with The Springs and The Meadows declining 9 per cent and Dubai Hills Estate falling 5 per cent, while Palm Jumeirah and Jumeirah Village Circle continued to post modest gains.
Rental rates also softened as affordability pressures encouraged tenants to seek better-value homes. Apartment rents saw the largest declines in Downtown Dubai (14 per cent), Dubai Hills Estate (10 per cent), Dubai Marina (10 per cent) and Palm Jumeirah (9 per cent). Villa rents also eased, with Dubai Hills Estate recording the sharpest quarterly decline of 12 per cent.
The latest declines extend a correction that began late last year, where property prices declined for the second month in a row to reach Dh1,673 per sq ft, according to the consultancy.
Supply remains on track
Despite the softer pricing environment, residential deliveries remained strong during the quarter. More than 13,200 homes were completed in Q2, including projects in Sobha Hartland, Damac Lagoons, Jebel Ali Village, Dubai Science Park and The Valley. Approximately 32,000 additional units are expected to be delivered in the second half of 2026, with a substantial development pipeline extending through 2030.
However, Cushman & Wakefield warned that contractor capacity constraints and supply chain issues are expected to affect project handovers in the coming months, even as overall delivery volumes remain broadly on track.
Source: Khaleej Times