Inside the UAE Housing Market. 2026 Explained

Dubai, UAE-As the UAE residential property market enters 2026, momentum remains strong, with market dynamics becoming more refined and opportunity-driven. After a year of broad-based growth in 2025, market performance is now diverging across emirates, communities and housing segments. Supply pipelines, affordability, infrastructure quality and buyer preferences are shaping distinct outcomes nationwide.

In this EXCLUSIVE interview with  Ali Siddiqui, , Research Manager, Cavendish Maxwell, we explore the key drivers influencing demand, price and rental trends, emerging investment hotspots, and the macroeconomic and regulatory factors set to define the UAE’s residential landscape in 2026.

Here are the key insights.

E.R- What are the key drivers shaping residential property demand in the UAE in 2026, and how do they differ from 2025?

Ali Siddiqui– The defining characteristic of the UAE residential property market in 2026 is that demand dynamics are expected to differ significantly across each emirate, marking a departure from the more uniform growth seen in 2025. Each emirate will have its own unique drivers and trends shaping demand. Dubai is expected to see the most pronounced shift, with approximately 108,000 units scheduled for delivery in 2026, and early indications suggest that sales prices and rental growth are moderating. In contrast, Abu Dhabi remains supply-constrained, with limited new inventory of around 12,800 units, supporting steadier price momentum. The Northern Emirates – Ajman, Ras Al Khaimah, Sharjah, Umm Al Quwain and Fujairah – are influenced by different dynamics, the main driver being that they are more affordable than Dubai and Abu Dhabi.  Looking ahead, near-term demand is expected to remain solid, supported by population growth and the continued influx of new companies, which in turns creates job opportunities and the need for more accommodation.  As a result, sales prices and rental rates are likely to continue rising, but the pace of growth will vary across emirates and between communities within each emirate.

E.R- Which emirates and neighbourhoods are projected to see the strongest price and rental growth this year, and why?

Ali Siddiqui– Growth projections for 2026 are expected to vary significantly across the UAE, with clear winners emerging based on supply-demand balance, infrastructure connectivity, the mix of end-users versus investors, and product quality. Established communities with tight supply, a range of amenities, strong transport links, and reputable developers are expected to see healthy appreciation, while oversupplied, investor-heavy areas with weak infrastructure will likely face pressure. Navigating the 2026 market effectively requires focused analysis on micro-location and localised performance drivers rather than broad emirate-level strategies.

E.R- How are macroeconomic factors (e.g., interest rates, inflation, population growth, foreign investment) expected to impact the residential market in 2026?

Ali Siddiqui– Several macroeconomic tailwinds are expected to support the UAE residential market in 2026. Continued foreign direct investment across the emirates, combined with population growth driven by job creation, will support housing demand. The IMF forecasts UAE GDP growth of around 5% in 2026, providing further confidence to the market. Interest rates are expected to come down as the Federal Reserve eases policy, with the UAE Central Bank tracking these cuts. This should modestly improve mortgage affordability and buyer sentiment, though the exact pace and intensity of reductions remain uncertain. On the cost side, the Construction Cost Index recorded a 2.5% increase in Q3 2025 compared with the previous quarter, reflecting ongoing pressure on development expenses. Overall, falling interest rates, population growth, foreign investment and continued economic diversification are expected to provide structural support to the residential market in 2026.

E.R- What emerging housing segments (e.g., luxury, affordable, mid-market, off-plan) are attracting the most interest from buyers and investors this year?

Ali Siddiqui– The off-plan segment was the most prominent across both Dubai and Abu Dhabi’s residential sectors in 2025, accounting for nearly 70% of all residential sales across both emirates. This segment is expected to remain prominent in 2026 if developers continue to launch new projects to maintain sales momentum, though this will further expand the already substantial pipeline of under-construction units.

Meanwhile, both the luxury and ultra-luxury segments in Dubai continued to perform strongly in 2025, with transaction volumes increasing by 47.1% and 31.9% respectively compared to 2024, supported by inflows of High and Ultra High Net Worth Individuals. With continued inflows of global wealth and Dubai’s reputation as a stable, attractive international hub offering world-class lifestyle amenities, demand for luxury properties is expected to remain resilient in 2026.

E.R- How are changing buyer preferences—such as work-from-home trends or sustainability priorities—affecting residential property demand? How will 2026 be for such buyers?

Ali Siddiqui– With hybrid work becoming the new normal for many people, demand for larger apartments and villas has increased, as buyers are increasingly prioritising space to accommodate home offices. In response, developers have started to integrate shared meeting rooms, co-working spaces and business lounges within residential developments to cater to flexible working. At the same time, lifestyle amenities have become critical differentiators, with buyers placing greater value on green spaces, fitness facilities, walkability, and access to everyday services.

E.R- Are there any new regulatory or policy developments anticipated in 2026 that could significantly influence residential property transactions or valuations?

Ali Siddiqui– While no major residential policy reforms have been formally announced so far this year in the UAE, several ongoing regulatory developments could still influence the market. Enhancements to long term residency schemes, particularly within the Golden Visa and Green Visa frameworks, may broaden eligibility or streamline processes, which would support demand from international buyers and long-term residents. In addition, Sharjah is set to implement an escrow account system. Previously, developers had to provide a 20% bank guarantee, but the move to an escrow structure is expected to strengthen buyer protection and boost investor confidence in the emirate’s real estate market.

This article was originally published in Emirates Reporter.