Dubai Home Prices Fall for the First Time in Several Years

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In September 2026, Dubai property prices fell by 4.5% compared with the same month in 2025, according to ValuStrat. The number of transactions declined by 38% in the third quarter, while rents also moved lower. The market is being affected by the military conflict in the Middle East, weaker demand and an increase in the supply of newly built homes.

Dubai Property Market Trends

In September, the ValuStrat index stood at 218.6 points, 10.3% below its February peak. Home prices dipped by 0.1% over the month, compared with a 0.2% decline in August. The pace of the downturn slowed, but property in Dubai remained considerably cheaper than at the beginning of 2026.

Apartments have been hit hardest, losing 6.4% of their value over the year. Villa prices fell by 3.4%, although about 80% of the villa communities surveyed showed no month-on-month change in September. Apartment prices also remained unchanged in approximately 77% of the areas covered by the ValuStrat study.

Other consultancies report a more modest decline. According to Cushman & Wakefield, average residential property prices in the third quarter were about 1% below their level a year earlier and barely changed from the second quarter. Savills also highlights differences in the properties sold: average apartment prices fell 4.8% quarter on quarter, but a comparison of like-for-like homes showed a decline of 1.7%.

Dubai Home Sales Decline

Between July and September, Dubai recorded approximately 34,500 residential property transactions worth a combined AED 70.8 billion ($19.3 billion), according to Savills. The number of sales fell 38% year on year and 4% compared with the preceding three months. In late 2025, more than 50,000 residential transactions were registered each quarter in Dubai.

The sharpest decline was in off-plan properties. According to Cushman & Wakefield, sales of homes under construction plunged 71% year on year, while transactions in the secondary market fell 33%. Part of the change was due to developers launching fewer new projects for sale.

Completed apartments and houses accounted for AED 25.1 billion in transactions in the third quarter, compared with AED 21.3 billion in the second, according to Savills. The total value of these deals increased by nearly 18% over three months. This segment represented approximately 35% of the value of all residential sales in Dubai.

Prices in Dubai's Prime Districts

The correction has been especially pronounced in several prestigious locations. According to Cushman & Wakefield's second-quarter report, apartments on Palm Jumeirah fell in price by 9% compared with the previous three months, while Downtown Dubai and Business Bay recorded declines of approximately 7%. Prices dropped by 4% in Dubai Hills Estate and 3% in Jumeirah Village Circle.

Villa prices varied even among expensive neighborhoods. In the second quarter, values in The Springs and The Meadows declined by 9%, while Dubai Hills Estate recorded a 5% drop. Palm Jumeirah and Jumeirah Village Circle, by contrast, posted modest gains of 1% and 2%, respectively.

Price changes in Q2 2026 compared with Q1. Source: Cushman & Wakefield

In the premium segment, prices continued to rise on an annual basis in the third quarter: apartments gained 4%, while villas and townhouses rose 3.6%, according to Savills. However, the number of transactions above AED 10 million fell from 871 in the second quarter to 669 in the third. Purchases in this price category declined by approximately 23% quarter on quarter.

Construction and New Supply

In the third quarter of 2026, construction was completed on approximately 12,900 apartments and houses in Dubai, bringing the nine-month total to 40,400. Cushman & Wakefield expects another 10,500 units to be completed by the end of December. That would lift annual completions to 50,900, an increase of 9% compared with 2025.

Around 60,000 more homes are scheduled for completion in 2027, although some projects may be delivered later. Delays are linked to shortages of contractors and disruptions in the supply of building materials. According to Savills, more than 525,000 apartments and houses are planned for completion in Dubai between 2027 and 2030.

Completed and planned homes. Sources: Cushman & Wakefield and Savills. Some periods overlap; totals should not be added together

Developers are already reducing the number of new properties brought to market. They launched approximately 5,000 apartments and houses for sale in the third quarter, compared with 36,400 in the second, while launches fell by about 64% over the first nine months compared with the same period in 2025. Companies are postponing sales launches, revising project schedules and offering buyers more flexible payment terms.

Tourism and Rentals in Dubai

Falling property values have also been accompanied by lower rental rates in Dubai. Cushman & Wakefield recorded a 7% year-on-year drop in average rents in the third quarter and a 4.5% decline compared with the previous three months. At the same time, the number of new rental contracts rose by 12% year on year and 32% quarter on quarter.

Savills estimates that approximately 181,900 rental transactions were registered between July and September, up 16% from the second quarter. The share of new contracts increased from 36% to 44% of all registrations. Around 80,000 new leases were signed during the three-month period.

The tourism sector experienced an even more difficult first half of the year because of air travel disruptions and a decline in international trips. According to CBRE, hotel revenue per available room in the UAE was 31.8% lower at the end of June than a year earlier. Visitor numbers began to recover in the third quarter, but key industry indicators remained below the record levels of 2025.

What Will Change in 2027?

The direction of the market in 2027 will depend on when new developments are completed and whether demand from international buyers recovers. Construction delays could spread the delivery of finished apartments over several years. If most projects are completed on schedule, competition for buyers will intensify, especially in areas with large-scale residential development.

In Abu Dhabi, the REIDIN index in September was 11.2% higher than a year earlier, compared with annual growth of 27.8% in April. Property prices there are still rising, but at a much slower pace than in the spring. This contrasts with the decline recorded in Dubai.

According to International Investment analysts, off-plan apartments purchased for quick resale are particularly vulnerable. By the time a development is completed, the number of competing listings could increase, while expected rental income may fall. With completed homes, buyers can verify actual rental rates, maintenance costs and demand in a particular neighborhood. A discount on the purchase price cannot make up for poor liquidity and prolonged vacancies.

Frequently Asked Questions

Should buyers wait for prices to fall further?

There is no single ideal time to buy: prices depend on the location, the property's characteristics and the seller's willingness to negotiate. Recent transactions involving comparable homes are a better reference point than asking prices alone.

Is it better to buy a completed home or an off-plan property?

A completed home can be inspected, and its suitability for living in or renting out can be assessed immediately. For an off-plan purchase, buyers should consider the handover date, payment schedule and finishing costs.

How should rental yield be calculated?

Deduct maintenance, repairs, management fees and potential vacancy periods from annual rental income. Divide the remaining amount by the total cost of purchasing and preparing the property for rental.