The war hasn’t dented Dubai’s property market too hard just yet. Dubai’s property prices held steady while absorbing record capital inflows in 1Q 2026, according to Dubai Land Department and Property Finder data cited by Al Khaleej. Total real estate transactions hit AED 251 bn during the quarter, up 30% y-o-y — the highest quarterly performance on record — across 61.6k transactions, up 6% y-o-y.

The first two months of the year offset any decline in sales in March. “The strength of the Dubai residential market during January and February 2026 has undoubtedly been the key driving force behind another very strong quarter of sales in 1Q,” Matthew Green, head of research at CBRE MENA, told EnterpriseAM. “January and February were phenomenal months, abnormal months even,” Director of Business Development and Client Relations at Cavendish Maxwell Zacky Sajjad told EnterpriseAM.

Even March, when viewed in a historical context, remained “quite strong,” Sajjad added. The market is operating with a sense of “business continuity,” he added.

Prices also have held more firmly than expected: Property Finder data shows just 1% of listings seeing price reductions even as global uncertainty rises.

But momentum may not hold: “We are now likely to see transactional conditions soften further through April as investor confidence is further tested,” Green said.

That was already expected, even before the war hit: “No market just keeps going up indefinitely,” Sajjad said, pointing to the sharp price and volume gains over the past five years. “There was always going to be a stabilizing period.”

REMEMBER- As we’ve previously noted, several analysts had pencilled in a correction for 2025, but with project delivery slippage, those expectations had been pushed out to this year. ValuStrat had seen growth moderating to around 10% in 2026 earlier in the year, and Moody’s now sees a cooling phase ahead — though not an outright correction — depending on how badly confidence takes a hit, and how long the war lasts.

There are healthy signals for the market

A sharp increase in mortgages — 46% to AED 59.7 bn, faster than regular sales — points to a more leveraged, and potentially more sticky, buyer base rather than purely cashdriven flows.

“With market maturity comes more borrowing,” Sajjad said, noting that even buyers with liquidity may choose to finance real estate given its illiquid nature and the UAE’s expat-heavy demographic.

Off-plan transactions alone also accounted for AED 81 bn of sales during the quarter, suggesting developers are still capturing demand and building pipeline despite external noise.

Concerns of real estate players potentially hitting a refinancing wall are more of a consideration now than before, as property bonds see their spreads blow out amid a broader regional sell-off, but analysts we spoke to don’t expect real estate players to default on payments. Analysts cite strong banking relationships, solid liquidity positions, and ample time ahead of maturity deadlines.

There are buffers in place: “Developers today are broadly better capitalized than during early covid times, following a really strong +five-year upcycle, so businesses are much better prepared to endure a period of potentially lower volumes,” Green said.

Less 2008, more managed cycle: Sajjad agreed that today’s market is “vastly different,” pointing to escrow protections, higher loan-to-value requirements, and stricter due diligence. “The risk has been de-risked a lot,” he said, adding that the market is “well placed to weather the storm.”

One thing that also helps? This is playing out against a slight contraction in supply, down more than 3%, helping keep prices anchored, according to Property Finder data.

Demand is still there, just more selective: Interest in properties above AED 5 mn has climbed to nearly a quarter of total demand, signaling that high-net-worth buyers are still leaning in, the data shows.

That shift is showing up in hard data: “Sales of +USD 5 mn homes and offices [...] rose from 711 in 1Q 2025 to 882 in 1Q 2026, reflecting growth of around 25% y-o-y,” Green said. The market is also still seeing large-ticket transactions, including a single AED 422 mn transaction, Property Finder data showed, underscoring depth at the top end.

Early-quarter demand was driven by a mix of new international inflows and existing investors, though activity in March likely skewed more toward existing buyers, Sajjad said. Dubai’s growing global profile, from aviation to tourism, continues to attract international buyers, while domestic demand remains resilient.

From an investor lens, volatility may even open doors. “The increased uncertainty is likely to create new [chances] to enter the market at levels not possible at the start of the year [...] particularly attractive for domestic-based investors that are typically positioned further up the risk curve,” Green said.

Where the pressure is building: The rental market

Demand for units under AED 75k has risen to 44.7%, though this may reflect volume realities more than a mismatch. “The volume of transactions is in studios and one- to two-bed units,” Sajjad said, noting that new supply is largely concentrated in more affordable segments.

Rental leads have fallen between 30-40% y-o-y, according to Betterhomes data we picked up yesterday, with tenant enquiries also dropping 16% y-o-y.

Tags: