Key Takeaways
- Chestertons Global’s Q2 2026 report shows a clear slowdown in residential activity.
- Dubai recorded approximately 36,620 residential transactions during the quarter, representing a 19% decline compared with Q1.
- Dubai’s office occupancy stood at approximately 94%, with average office rents increasing by 13% year-on-year.
Dubai’s property market is entering a new phase. The strong growth story continues, but investors can no longer assume that every property type, location or new launch will perform equally well.
Chestertons Global’s Q2 2026 report shows a clear slowdown in residential activity. Dubai recorded approximately 36,620 residential transactions during the quarter, representing a 19% decline compared with Q1. The total value of residential sales fell more sharply, dropping 36% to AED 87.9 billion.
This does not necessarily indicate a market collapse. Instead, it suggests that buyers are becoming more selective, particularly as additional residential supply enters the market and investors have more projects to choose from.
Off-plan properties continued to dominate, accounting for 76% of residential transaction volume. This demonstrates continued confidence in Dubai’s future growth, but it also creates new risks. A successful launch does not automatically guarantee strong resale demand. Investors must now consider the original launch price, the developer’s reputation, the amount of competing supply expected before completion and any restrictions on resale.
Performance is also becoming increasingly different across residential sectors. Average apartment prices declined by 3.1% during the quarter to AED 1,814 per square foot. In comparison, villas and townhouses proved more resilient, with average prices reaching AED 2,339 per square foot, an annual increase of 7.7%.
This difference reflects the relative scarcity of good-quality family homes compared with the growing number of apartment launches. Generic apartments in heavily supplied locations may face greater competition, both during construction and when investors attempt to resell or rent them.
Commercial property is showing stronger supply-and-demand fundamentals. Industrial rents increased by 23.3% annually to AED 66.4 per square foot, while retail rents rose by 18.3%. Office leasing contracts increased by 15.2%, although many companies are choosing smaller and more efficient premises.
The warehouse market is particularly strong. Grade-A warehouse occupancy is estimated at approximately 95%, despite an additional 5.4 million square feet of space expected to enter the market over the next two years.
CBRE’s Q2 2026 review supports the same overall direction. It found that residential demand and transaction activity had moderated as new supply arrived, while office and industrial assets remained supported by limited availability. Dubai’s office occupancy stood at approximately 94%, with average office rents increasing by 13% year-on-year.
The main lesson for investors is clear: “Dubai is growing” is no longer enough to justify a purchase. Capital is moving toward scarcity, quality and proven demand.
Well-located villas, Grade-A offices, modern logistics facilities and selected retail properties currently offer stronger fundamentals than mass-market apartment stock. This does not mean apartments or off-plan investments should be avoided. It means they must be evaluated more carefully.
Dubai has not become a weak property market. It has become a selective one. The opportunity is no longer simply to buy property in Dubai—it is to identify and buy the right kind of scarcity.
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