• Developers hold key to off-plan transactions, representing up to 94% of buyer activity
• Dubai South claims top spot for off-plan apartment sales
• Rental rates up 10.2%, with slowest annual growth since 2022

Dubai’s residential property market secured AED139.1 billion worth of sales across 44,200 transactions between January and March 2026, a year-on-year rise of 21.5% and 4.6% respectively, according to new research by leading real estate advisory and property consultant, Cavendish Maxwell.

Off-plan sales accounted for 73% of all transactions, with over 32,300 units sold for a combined value of AED105.5 billion, up nearly 35% compared to Q1 2025, the company said. Nearly 92% of Q1 off-plan purchases were directly from developers, with buyers taking advantage of attractive pricing and payment plans. In March, the figure rose to 94%, according to Cavendish Maxwell’s latest insight.

Cavendish Maxwell’s Dubai residential real estate market report for Q1 2026 also highlights a rise in transaction values, particularly in the off-plan segment, with year-on-year growth in sales values significantly outpacing an increase in volumes.

Quarter-on-quarter, residential sales declined by around 17% – a similar trend seen in Q1 2025, suggesting some degree of seasonality, including Ramadan and Eid Al Fitr, in first-quarter activity.

Ronan Arthur, Director, Head of Residential Valuations at Cavendish Maxwell, said: “While Dubai’s residential market started the year from a strong position, mixed conditions during Q1 – including geopolitical tensions, a moderation in transactions, slowing price growth and a rising supply pipeline – have collectively signalled the beginning of a more balanced phase of the real estate cycle. Looking ahead, we are likely to see fewer transaction volumes in Q2, when the combined effects of regional uncertainty, the 60 to 90-day lag in registrations and a reduction in new project launches will be reflected in market activity and transaction data.

“The outlook for the rest of the year will depend on how quickly conditions stabilise, the absorption of the supply pipeline and the level of demand from end-users and investors. Opportunistic investors remain active, Dubai’s structural fundamentals remain intact and all the factors that have always supported Dubai’s long-term market appeal hold strong,” he added.

Cavendish Maxwell’s report also shows that in Q1 2026:

• Apartments dominated both off-plan and ready property sales, accounting for more than 80% of transactions in both segments
• Dubai South moved into the top position for off-plan apartment sales, with 2,340 transactions, while Jumeirah Village Circle retained its number one spot for ready apartments, with 1,036 transactions
• DAMAC Islands 2 stayed in top position for off-plan villas and townhouses, as did DAMAC Hills 2 for ready homes
• Prices reached AED1,683 per square foot, up 0.6% compared to the previous quarter and 9.6% year-on-year. Q1 2026 saw the slowest annual growth for three years
• Rents climbed 10.2% year-on-year, with the slowest pace of growth since 2022
• Sales of luxury homes (costing over AED20 million) rose more than 25% year-on-year, and sales of ultra-luxury properties (over AED50 million) increased nearly 79%. Together, these segments secured AED38.4 billion in sales across 840 transactions.

Apartments versus villas

Developers continue to prioritise apartment-led projects for new launches, supported by strong buyer demand driven by lower entry price points and potentially strong rental yields. Flats accounted for 80% of off-plan sales, up from 74% in Q1 last year. Apartments also dominated ready sales, with an 80% market share.

Townhouses secured 13% of total off-plan sales, with villas taking 6.5%, up 4.2% and 3.7% respectively compared to Q4 last year. In the ready sector, townhouses made up 12.7% of sales, and villas 7.1%, both with virtually the same market share both quarter-on-quarter and year-on-year.

Dubai South moves north to top sales spot

Dubai South became the most popular area for off-plan apartment sales in Q1, with 2,340 transactions. In second place was Dubai Residence Complex (1,992), followed by Jumeirah Village Circle (1,857), Dubai Islands (1,645), and Majan (1,157). In the ready apartment sector, Jumeirah Village Circle retained its top position with 1,036 sales, followed by Business Bay (632), Majan (474), Dubai Marina (444) and Downtown Dubai (376).

Meanwhile in the off-plan villa and townhouses segment, DAMAC Islands 2 was the clear winner, with 2,762 sales in Q1. Next was The Heights Country Club and Wellness, with 739 sales, followed by The Oasis (518), Grand Polo Club and Resort (317) and The Valley (194). DAMAC Hills 2 sold the most ready villas (230), followed by Dubai South (134), Al Furjan (104), The Valley (104) and The Springs (103).

Sales and rental prices rise, but pace slows

The average price of buying a home rose to AED1,683 psf, up 9.6% compared to Q1 2025 but just 0.6% higher than in Q4. Although January to March 2026 saw the slowest annual price growth for 3 years, signalling an easing in price momentum. Prices remain well above 2024 levels, which reached AED1,493 psf.

Rental rates rose 10.2% year-on-year and 0.8% compared to Q4, with the slowest pace of growth since 2022. This moderation was driven by increased supply coming to the market in Q4 last year and Q1 this year, giving tenants with more choice and better negotiating power. Around 149,000 rental contracts were registered in Q1, with renewals accounting for 66%. Overall, there were 2.2% fewer rental contracts compared to Q1 last year, primarily driven by a 13.6% decline in March.

Average rental yields stood at 7.2% for apartments, with some areas commanding 8% or more. The biggest yields were found in International City Phase 2 (9.2%), International City Phase 1 (8.9%), and Downtown Jebel Ali (8.7%). Villa and townhouse yields were 5% on average, with Al Barari securing 7.2%, Dubai Industrial City 6.2% and DAMAC Hills 2 returning 5.8%.

The life of luxury …

Demand for luxury and ultra luxury property continued to rise in Q1, reinforcing the city’s status as a global destination for top-end real estate. Sales of luxury homes – those worth between AED20 million and AED50 million – rose more than 25% year-on-year, with 740 transactions collectively worth AED28.2 billion. The ultra-luxury segment (over AED50 million) secured AED10.2 billion in sales across 100 transactions – a sizeable annual increase of nearly 80%.

Deliveries, launches and future developments

Some 12,900 residential units were delivered in Q1 – the highest quarterly total for 3 years and a 23% jump compared to Q1 2025. However, the number of handovers was lower than the initial projection of 30,000, reflecting a materialisation rate of 42%. Apartments accounted for 8,000 deliveries, representing 62% of the total.

Around 22,900 units across 90 new residential real estate projects were launched in Q1, down 57% on the same period in 2025 and the lowest quarterly count in more than 2 years. Most launches were in January and February before a decline in March, coinciding with Ramadan and the onset of regional tensions, which appear to have prompted some developers to pause or defer new launches.

Approximately 77,500 units are projected for delivery this year, with 29,600 scheduled for completion in Q2. As per previous patterns, actual deliveries are likely to be lower than originally predicted, with 9,000 to 15,000 expected between April and June.

Another 146,000 units are in the pipeline for 2027, followed by 120,100 in 2028. While delivery timelines may continue to shift, delays are more likely to redistribute supply rather than reduce it.