Dubai saw only 59% of projected property delivery last year, consistent with historic delivery slippage and keeping concerns of oversupply at bay, according to ValuStrat’s latest Dubai Real Estate Review (pdf). Developers completed just 36k homes in 2025, while this year some 131k units are slated for delivery, though downward revisions of that forecast are likely given the shortfall last year, ValuStrat says.

This likely means more price growth in the near-term, though with a continuation of a more normalized, slower pace of growth, as is evidenced by growth in 4Q 2025.

Capital values rose 19.8% y-o-y in 4Q 2025, though aggregate gains are expected to ease toward 10% this year, reflecting normalization rather than weakening fundamentals.

Demand remains structurally strong: Dubai’s population rose to just under 4.5 mn in 2025, while the peak-hour population reaches roughly 6.1 mn once commuters are included. The population uptick continues to underpin demand across housing, offices, and logistics, even as headline growth cools.

REMEMBER- As we’ve covered, prices have climbed roughly 70% over the past five years, leaving less room for outsized gains. ValuStrat expects growth to become more uneven by segment, with rental increases set to flatline next year as affordability ceilings bite — even as villa prices continue to outperform due to persistent undersupply.

Prices cool, rents hit resistance

Villa values rose 25.1% y-o-y, more than double the pace of apartments at 14.2%, even as quarterly gains across both segments slowed to their weakest pace since mid-2023.

Prime homes did much of the heavy lifting, with around 500 transactions above USD 10 mn last year — including 143 in 4Q alone — pushing prime prices past AED 4.4k per sq ft, Knight Frank said in a parallel review (pdf).

Residential sales value rose 25% y-o-y to AED 544.2 bn in 2025, outpacing an 18% increase in volumes to 205.4k transactions, according to Knight Frank. The widening gap points to a market increasingly driven by capital appreciation and higher-value assets, rather than turnover alone.

Rents are now encountering resistance: Apartment and villa rents were broadly flat q-o-q in 4Q, signaling an affordability ceiling rather than fading demand. With average apartment rents near AED 96.7k and villas above AED 430k, investor focus is shifting away from yield expansion toward capital preservation — and toward formats where supply cannot respond quickly.

REMEMBER- Rents are also expected to flatline in 2026, ValuStrat said earlier.

Where the pressure has shifted: Offices and industrial

Office capital values jumped 25.3% y-o-y, led by prime districts — DIFC surged 35.5% — as occupier demand collided with a shortage of grade A space. Just 153.1k sqm of new space is expected to be delivered in 2026, tightening conditions further.

Industrial assets continue to compound quietly: Logistics capital values rose 14.3% annually, with Jafza South up nearly 25%, driven by tight modern warehouse supply and a pivot toward Dubai South and Al Maktoum International Airport. Demand from e-commerce, manufacturing, and logistics operators continues to outpace new stock.

By contrast, Abu Dhabi is still accelerating

As we previously reported, ValuStrat expects Abu Dhabi to post stronger gains in 2026, led by offices and apartments. Office rents are forecast to rise 20% y-o-y, with capital values up 10%, supported by 93% occupancy and minimal new supply. Apartments are penciled in for 16% price growth and 6% rent growth, as delivery delays once again cap completions.

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