Gulf property markets split in 2Q as Dubai cools, Abu Dhabi surges and Kuwait bottoms out

The Gulf’s biggest property markets are each moving in different directions. In 2Q 2026, Dubai cooled under its own supply, Abu Dhabi caught fire on foreign money, and Kuwait finally found a floor.

Dubai delivered a near-record 27.3k residential units in 2Q even as transactions fell 19% q-o-q to 35.9k, according to Savills’ latest Dubai Residential Market report (pdf). The result is not a citywide correction so much as an increasingly uneven market, with the heaviest pressure coming where new supply is concentrated. ValuStrat’s June index showed residential values falling 1% m-o-m, a cumulative 10% since late February — but the averages hide sharper moves underneath. Apartment prices dropped 4% q-o-q against near-flat villas; supply-heavy Dubai Hills Estate and Arabian Ranches 3 are off c. 10% since February, while supply-starved Reem Mira barely budged.

Developers have seen the signal and are hitting the brakes upstream. Launches collapsed to c. 5.3k units from more than 45k in 1Q, and delivery timelines are being stretched from three years to four. Refinancing now makes up 70% of valuation activity, up from c. 30% historically, suggesting owners are restructuring borrowing rather than selling into a softer market.

Abu Dhabi is doing the exact opposite, booking AED 117 bn in transactions in 1H, up 112% y-o-y, with sales value jumping 163.7% to AED 86.1 bn, according to Abu Dhabi Real Estate Center (Adrec) data picked up by the Abu Dhabi Media Office.

Foreign capital is the engine: FDI into property hit AED 13.8 bn, up 309% and already past the full-year 2025 total, with buyers from 116 nationalities versus 82 a year earlier. Investment zones pulled in AED 75 bn, up 181%. A June rent freeze across all property classes has only sharpened the pitch to long-term money.

Kuwait’s rebound is real but rented. Total sales fell to KWD 826 mn in 2Q (-8.2% q-o-q; -17.8% y-o-y), the weakest in over two years, dragged down by a near-halving of commercial transactions. Still, residential sales rose 8.2% q-o-q and prices posted their first quarterly gain (+1%) in a year. The catch: Prices are still down 10% y-o-y, and the whole recovery hangs on the US-Iran ceasefire holding.