Dubai entered a genuine correction in Q2 2026, absorbing the full weight of the regional shock that Abu Dhabi largely avoided. Residential transactions, capital values and rents fell simultaneously for the first time in the current cycle, while commercial and industrial markets held firm, supported by limited supply, sustained institutional investment and continued confidence in the emirate’s long-term outlook.
Residential Enters Correction
Transactions fell approximately 19% quarter-on-quarter to 35,884, apartment values eased 4.0% to AED 1,960 per sq ft, and rental rates declined 8-10% across major communities – with like-for-like pricing adjustments of 5-7%, and up to 10% in selected locations. Supply became the dominant variable, with Q2 handovers estimated between 9,200 and 27,300 units against only 5,335 units launched, marking a structural inversion from a launch-led to a delivery-led market.
Commercial & Industrial Outperform
Office leasing rose 4% quarter-on-quarter with rents holding at AED 238 per sq ft and occupancy at approximately 94%, marking the first quarter without rental growth since H1 2021. Industrial rents continued to grow across every tracked location, with the strongest increases recorded in Dubai Industrial City, Dubai Investments Park and National Industries Park, making industrial the strongest-performing asset class in the report.
No Distress, Just Deferral
Only around 4% of surveyed property owners intend to sell within six months, and refinancing rose to approximately 70% of Dubai valuation instructions by quarter-end. Falling volumes reflect deferred decisions and a buyer-seller pricing impasse driven by regional uncertainty, rather than financial distress – a key factor for landlords and investors to weigh in income-based valuations going forward.
Get the full breakdown of residential, commercial, and industrial performance, market sentiment data, and SKH’s outlook for the second half of 2026.