The real estate market in Dubai is starting to lose some of the extremely strong momentum with which it entered 2026. Residential transactions decreased in the second quarter, and buyers became more cautious against the background of the increasing choice of new properties. However, analysts do not indicate a collapse, but a gradual return to more balanced market conditions.
According to data from the consultancy company Savills, 35,884 residential transactions were recorded in Dubai in the period April-June, which is a decrease of 19% compared to the previous quarter. The consultancy company explains the change with a larger supply, a wider choice for buyers and their more cautious behavior.
Record amount of new homes coming onto the market
One of the key factors for the change is the significant volume of new construction. Around 27,300 homes were completed and handed over in the second quarter, which according to Savills is the highest quarterly level of new supply in recent years.
The greater number of completed homes is gradually changing the balance between sellers and buyers. While in previous years, limited supply allowed developers to rely on very strong demand, today customers have more alternatives and can compare price, location, quality and payment terms more carefully.
This does not mean an outflow from the market. Rather, we are witnessing a transition from a period in which almost any new project could attract serious attention, to an environment in which the quality of the specific property and its price are increasingly important.
New construction continues to dominate
A large part of the activity in Dubai continues to be directed towards greenfield properties. The segment remains the main driver of sales, although buyers are also starting to approach it more cautiously.
For developers, this means increasing competition. With more projects on the market, buyers can choose between different payment schemes, completion dates, locations and levels of finishing work.
That is why analysts expect the reputation of the investor, the quality of the project and realistic pricing to be increasingly important.
Offices show greater resilience
The situation with office space is different. Data from the Dubai Land Department, cited by Savills, shows 38,082 office lease transactions in the second quarter, an increase of about 4% compared to the first three months of the year.
Savills defines the office market as relatively stable, with demand for quality, high-end space remaining resilient. At the same time, companies are making more cautious decisions and paying more attention to space and cost efficiency.
This means that the cooling of the Dubai property market is not happening equally in all segments.
Normalization, not collapse
After several years of strong growth, Dubai is entering a phase in which the record pace of transactions is gradually calming down. MEED itself defines what is happening as normalization after an exceptionally strong first quarter, rather than a broad market correction.
A similar assessment is also supported by other market analyses. Savills reports a decline in the number of residential transactions, but at the same time continued demand and a significant volume of new construction.
For buyers, the change could mean better choices and a stronger negotiating position. For investors and developers, however, the new environment means that projects will now have to compete much more strongly on price, quality and location.
After the rapid growth of recent years, the Dubai market seems to be moving to the next stage - less speculative dynamics and more careful selection by buyers.
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