The pace of house price declines eased considerably during the second quarter, pointing towards a gradual market stabilization
The Dubai real estate market is entering a crucial phase of post-conflict stabilization, marked by an easing of residential price corrections alongside sustained expansion across the commercial and industrial sectors.
ValuStrat’s second-quarter 2026 market intelligence report revealed that the Dubai residential market responded quickly following the ceasefire announcement. The ValuStrat Price Index (VPI) recorded a monthly decline of just 2 percent in April, a marked improvement from March’s 6 percent contraction, followed by more modest declines of 1 percent in both May and June.
The trend suggests that the pace of house price declines eased considerably during the second quarter, pointing towards a gradual market stabilization.
Dubai real estate prices remain stable
Dubai’s freehold residential ValuStrat Price Index (VPI) fell 4 percent quarter-on-quarter, 10 percent since the start of the conflict, to 220 points, broadly unchanged from 219.8 points a year earlier, with all values benchmarked to a Q1 2021 base of 100.
The weighted average capital value of a typical Dubai villa reached AED13 million, up 2 percent from AED12.78 million a year earlier, while apartment values averaged AED1.79 million, down 3 percent annually from AED1.85 million.
The villa index declined 4.2 percent quarter-on-quarter to 293.7 points. Most villa communities remained stable, with none recording growth. Selected communities saw downward value adjustments, including quarterly declines of up to 11 percent on Palm Jumeirah.
Apartment values declined 3.7 percent quarter-on-quarter, bringing the index to 169.1 points. Quarterly gains were recorded in International City (2.4 percent), Dubai Sports City (1.4 percent) and Al Quoz Fourth (1.1 percent), while other apartment communities posted declines of up to 13.2 percent over the quarter.
Meanwhile, office capital values resumed their growth trajectory in Q2 2026, supported by improving market sentiment and a limited pipeline of new supply. In addition, Dubai’s industrial property sector maintained its upward momentum, underpinned by resilient demand for logistics space and the continued expansion of e-commerce activity
Dubai’s prime and high-end properties post strong capital growth
Dubai’s prime and high-end residential real estate segment recorded slightly stronger annual capital growth in Q2, driven primarily by continued villa price appreciation over the past year. However, prime residential prices declined for a second consecutive quarter, suggesting that the upper end of the market is beginning to stabilize after an extended period of strong growth.
The segment’s ValuStrat Price Index (VPI) reached 234 points in Q2 2026, based on a Q1 2021 benchmark of 100. Prime property values rose 1.1 percent year-on-year but fell 4.5 percent quarter-on-quarter. The prime villa sub-index reached 325.3 points, up 7.1 percent annually, though down 2.7 percent over the quarter.
Premium apartments recorded more subdued performance, with values declining 4.9 percent year-on-year and 6.4 percent quarter-on-quarter, bringing the index down to 178.3 points.
Read: Dubai’s property market holds firm as rental yields reach 9.06 percent in H1 2026
Residential supply pipeline expected to hit record 129,066 units
The report also revealed that the residential supply pipeline for this year is estimated at a record 129,066 units, comprising approximately 82 percent apartments and 18 percent villas and townhouses. However, given persistent construction delays, these projections remain subject to downward revisions, consistent with trends observed in previous years.
Total estimated completions as of the second quarter stood at 15,039 apartments and 5,218 villas, equivalent to 15 percent of preliminary estimates for the whole of 2026.
In Q2 2026, villa completions were led by 2,179 homes in DAMAC Lagoons and 614 homes in Jebel Ali Village. Apartment deliveries were concentrated in Jumeirah Village Circle with 1,273 units, Sobha Hartland with 965 units, and Dubai Creek Harbour with 794 units. Key building completions during the quarter included Samana Santorini with 157 apartments, Ellington House II in Dubai Hills with 166 properties and Regalia in Business Bay with 913 units.
Notable villa community completions included Malta and Costa Brava townhouses and villas in Damac Lagoons, delivering 2,179 homes, and Elora townhouses in The Valley, adding 430 units.