Dubai rents ease 6.2% while home prices stay above 2025 levels

Dubai: Tenants in Dubai saw some relief during the second quarter of 2026, with average residential rents falling 6.2% from the previous three months, while property prices remained above last year’s levels.

Average rents were also 2.6% lower than a year earlier, according to CBRE Middle East’s latest UAE Real Estate Market Review.

Home sales prices remained 1.9% higher year on year, suggesting that the market has moved into a period of moderation following several years of strong growth.

Around 18,000 residential units were completed across Dubai during the first half of the year, adding more options for tenants and buyers and helping to ease some of the pressure on prices.

Fewer than 37,000 residential transactions were recorded in Dubai during the second quarter, a decline of 29% from more than 51,000 sales in the same period of 2025.

The total value of transactions reached Dh88 billion, compared with nearly Dh154 billion a year earlier.

CBRE linked the slowdown to softer demand, fewer new project launches and increased housing supply during the first six months of the year.

The figures suggest that buyers are facing less competition than they did during the stronger conditions recorded last year.

Dubai’s office market continued to record strong demand, particularly for high-quality space in major commercial districts and free zones.

Average office rents increased 13% in the year to the end of the second quarter, while prime office rents rose 16%.

Occupancy remained at approximately 94%, reflecting the limited availability of Grade A offices across the city.

Demand remained concentrated in DIFC, TECOM and DMCC, where companies continued to lease space in future developments before construction was completed.

Abu Dhabi recorded similar conditions, with average office rents rising nearly 16% and occupancy reaching approximately 96%.

Demand was strongest in Abu Dhabi Global Market, supported by growth among financial services companies, hedge funds and investment firms.

Less than 300,000 square metres of new office space is expected to be completed in Abu Dhabi between 2026 and 2027, which CBRE said was likely to keep supply tight.

Abu Dhabi’s residential market continued to attract buyers during the second quarter, with property values rising 21.6% from a year earlier.

Apartment prices increased 24.4%, while average rents remained 3.6% higher year on year despite some moderation during the quarter.

Residential sales reached Dh32 billion, marking a 150% increase from the same period of 2025, while the number of transactions rose by around 80%.

Off-plan homes accounted for approximately 83% of transactions and 85% of total sales value.

Retail properties continued to record high occupancy despite softer tourist spending and changes in consumer demand.

Occupancy remained at approximately 98% in Dubai and 95% in Abu Dhabi, broadly unchanged from a year earlier.

Dubai retail rents increased by around 3%, while rates in Abu Dhabi remained largely stable.

New retail developments in the pipeline include Al Khail Avenue in Dubai and the first phase of retail space at Saadiyat Grove in Abu Dhabi.

Industrial and logistics property remained one of the strongest parts of the UAE real estate market, supported by manufacturing investment, supply chain localisation and foreign direct investment.

Rental growth continued across Dubai Industrial City, Dubai Investments Park and National Industries Park.

Abu Dhabi’s market benefited from Dh48.5 billion in investment commitments announced through the Make it in the Emirates initiative and new logistics agreements within KEZAD.

Industrial exports reached Dh262 billion in 2025, while government programmes including Operation 300bn continued to support manufacturing and logistics activity.

CBRE expects the UAE economy to record a marginal contraction of 0.04% in 2026 following disruption to trade, tourism, aviation and other consumer-facing sectors.

“What remains particularly noteworthy is the speed and scale of the UAE's policy response, from supporting business continuity and trade flows to advancing economic partnerships and diversification initiatives,” Green said.

“Although near-term conditions are likely to remain challenging, the country's long-term growth trajectory remains supported by structural reforms, strategic investment and its position as a leading hub for trade, capital and talent.”