Dubai's residential property market recorded housing transactions worth AED 225.7 billion in the first half of 2026 (H1 2026), representing a 16% decline from H1 2025, according to a report by property consultancy Anarock. Despite the transaction decline, the market demonstrated resilience as average residential prices increased 6% year-on-year to around AED 1,900 per square foot, compared with AED 1,800 per square foot in the same period last year. As reported by Anarock, H1 2026 transactions still posted 15% growth over H1 2024, indicating underlying market strength and retaining much of its post-pandemic momentum. The report, titled 'Dubai Real Estate: Built on Vision. Proven by Numbers', highlighted that while geopolitical tensions briefly affected buyer sentiment during March and April 2026, the correction was largely sentiment-driven rather than structural.
The market experienced temporary disruption during geopolitical tensions in March and April 2026, with residential prices softening by 4-7% during the February-April period, according to Anarock. However, as reported by the consultancy, the correction was largely sentiment-driven rather than structural, with residential prices significantly outperforming the DFM Real Estate stock index, which crashed 34% at its peak - the widest sentiment-to-asset gap of any Dubai crisis on record. "The decline was driven largely by sentiment rather than any weakness in market fundamentals," said Aayush Puri, CEO – Residential, Middle East at Anarock. The recovery has been supported by robust market fundamentals, with weekly residential sales touching AED 10 billion during the recovery phase, indicating investors viewed the slowdown as temporary rather than a change in long-term market fundamentals. As Puri noted, "The conflict early in 2026 tested Dubai's residential market at a time when regional uncertainty was at its peak. In the months that followed, buyer activity returned steadily, prices remained resilient, and demand continued to be supported by strong structural fundamentals rather than speculative momentum."
Off-plan transactions consistently accounted for 70-77% of market activity throughout H1 2026, highlighting sustained buyer confidence despite short-term uncertainty, as reported by Anarock. An off-plan transaction refers to the purchase of a property directly from a developer before construction is completed. This high proportion of off-plan sales demonstrates continued investor confidence in Dubai's long-term development pipeline and the market's ability to attract pre-construction investment. The report noted that off-plan sales accounting for nearly 70-77% of all residential transactions during the period, indicating sustained buyer confidence despite short-term uncertainty.
Dubai welcomed approximately 470 new residents every day during 2025, with the city's population crossing 4.03 million, according to Anarock. The report revealed that buyers from more than 150 countries purchased residential property in Dubai in 2025, with India accounting for 22% of buyers, followed by the UK (17%) and China (14%). More than 129,600 new investors entered the Dubai market during 2025, up 23% year-on-year, while around 80% of transactions were cash-funded. Among buyers, 38% purchased homes for end-use, 28% for rental income, 21% to obtain Golden Visa residency, while 13% invested primarily for capital preservation, as reported by Anarock. The expansion of Golden Visa eligibility to include mortgaged properties is also expected to widen the pool of international buyers.
According to Anarock, the market is now entering a more selective phase where investment performance will increasingly depend on micro-market fundamentals rather than broad-based price appreciation. In a more optimistic scenario driven by a sustained ceasefire and stronger investor confidence, residential prices could appreciate from 4-7% during 2026, supported by continued population growth, expanding international buyer participation and favourable government policies. The report highlighted that premium destinations such as Palm Jumeirah and Downtown Dubai are expected to continue attracting global wealth, while emerging infrastructure-led locations such as Dubai South could witness sustained long-term growth. Historical data shows Dubai's resilience - during the Global Financial Crisis, residential prices declined by nearly 40% but recovered within three and a half years, while during COVID-19, prices fell only 6% before recovering within 13 months. The Russia-Ukraine conflict (2022) period was no decline at all, with Dubai benefiting as Russian capital re-rated Palm Jumeirah pricing.
