Real Estate

Dubai’s residential real estate market has transitioned into a more measured phase following a robust start to the year, according to the latest report by Savills. While price growth remains steady and off-plan properties continue to dominate, overall activity has moderated due to a mix of seasonal and geopolitical factors.

Transaction volumes in the first quarter reached approximately 45,208, marking a 17% quarter-on-quarter decline after three consecutive quarters in 2025 where transactions exceeded 50,000. Market activity in January and February remained largely consistent with last year’s trends, before easing in March.

The slowdown has been attributed to regional geopolitical developments, alongside seasonal influences such as Ramadan, Eid al-Fitr, and spring school holidays, all of which contributed to a more cautious approach among buyers and investors.

The moderation was particularly visible in the secondary (ready) property segment, where transactions dropped by around 40% month-on-month in March. As a result, the segment’s share of total transactions declined from approximately 30–33% in January and February to about 23% in March.

Despite the short-term slowdown, underlying market fundamentals remain strong. The off-plan segment continued to lead activity, accounting for 72% of all transactions in Q1, supported by sustained investor confidence and demand for high-quality developments. However, a slowdown in new project launches may temper this momentum in the coming months.

The prime residential market also showed resilience, recording 2,064 transactions valued above AED 10 million during the quarter. Demand remains particularly strong for premium, well-located properties, even as activity softened slightly towards the end of the quarter.

On the pricing front, average property values continued to rise. Apartment prices increased from AED 1,942 per square foot in 2025 to AED 2,010 per square foot in Q1 2026. Similarly, villa and townhouse prices climbed from AED 1,501 per square foot to AED 1,664 per square foot. However, analysts suggest that pricing may face downward pressure in Q2 as buyers negotiate more aggressively for value.

Andrew Cummings, Head of Residential Agency at Savills Middle East, noted that the market is undergoing a natural recalibration following a prolonged period of strong growth. He emphasised that the recent moderation reflects external and seasonal factors rather than any fundamental shift in demand.

Dubai’s property sector continues to be supported by long-term drivers, including population growth, sustained investor interest, and the city’s global appeal. High-quality developments and prime locations remain key factors attracting both end-users and investors.

In the near term, the market is expected to reflect a more cautious and selective approach, with a noticeable shift from a seller’s market to a buyer’s market. As a significant pipeline of future supply enters the market, performance will increasingly depend on asset quality, location, and competitive pricing strategies.

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