Dubai’s property market was tested this summer, but the more important story is how it responded.

Sales fell sharply in May before recovering through June and July and easing again in August. Prices, however, remained firm across most communities. Rental activity reached a record high. Off-plan continued to account for the majority of purchases, while luxury buyers increasingly favoured new product over resale homes.

betterhomes has analysed Dubai Land Department data from May through August to understand what changed beneath the headline sales figures and what those changes could mean for the final months of 2026.

Sales rebounded 38% from May’s three-year low, showing demand was delayed rather than lost 

May recorded 9,536 property sales, Dubai’s lowest monthly total in three years, following a period in which regional developments had made some buyers more cautious.

What happened next is more useful than the May figure itself.

Sales increased 28% month-on-month in June to 12,185 and reached 13,116 in July, a 38% recovery from the May low. August then eased to 11,087 sales.

That pattern suggests a market in which purchasing decisions were postponed and then released once conditions became clearer, rather than demand disappearing altogether.

It also helps explain why looking at any single summer month gives an incomplete picture. May understated the level of underlying demand. July, at the other end, reflected some of that delayed activity returning to the market.

“The summer showed us the difference between demand disappearing and demand being delayed. Buyers became more cautious when conditions were less clear, but they came back quickly once confidence returned. That matters because it tells us the underlying reasons people are buying in Dubai have not materially changed.”

Richard Waind, Chief Executive Officer, betterhomes

More than 40,000 June tenancy contracts show housing demand stayed in Dubai even when buyers paused 

The leasing market gives another view of what was happening underneath the sales slowdown.

More than 40,000 new and renewed tenancy contracts were recorded in June, the highest monthly figure Dubai has seen.

That matters because some households that delayed a purchase still needed somewhere to live. Strong leasing activity suggests some of that delayed buying demand remained within Dubai’s housing market.

Average rents were still 3.1% higher year-on-year, while Jumeirah Islands recorded annual rental growth of 25%.

At the same time, increasing rental stock is beginning to give tenants more choice. That should make correct pricing more important for landlords as additional homes enter the market.

“The rental figures show that housing demand remained strong even when some buyers were taking longer to make a decision. As more rental stock becomes available, landlords will need to pay closer attention to pricing and property quality.”

Rupert Simmonds, Director of Leasing, betterhomes

Stable prices are one of the summer’s most important signals

Sales volumes moved considerably between May and August. Property values did not move with them.

Price per square foot was higher year-on-year in 81% of the Dubai communities tracked in betterhomes’ analysis of DLD data, with a median increase of 6.6%.

Palm Jumeirah Garden Homes led villa growth at 37% year-on-year, while Al Jaddaf recorded the strongest apartment increase at 35.5%.

This is important because a genuine market-wide correction would normally be expected to appear not only in fewer transactions, but also in greater pressure on pricing.

So far, there is little evidence of broad-based discounting.The market is increasingly being shaped by individual communities and property types rather than moving in one direction.

Off-plan held up to 76% of sales, and buyers grew more selective about where that demand went 

Off-plan made up between 71% and 76% of monthly sales from May to August. Payment plans, newer designs, a developer’s track record and up-and-coming locations kept pulling buyers in, especially when resale stock nearby was priced about the same.

But buyers were pickier about where that money went. Off-plan villa and townhouse sales were up 27% year-on-year in the second quarter, and the value of those sales climbed 83%. Off-plan luxury sales above AED 15 million were still 12% higher than a year earlier in August. Buyers had the capital. They just wanted the right developer, the right location, the right spec, before they’d spend it. Resale stock that didn’t measure up struggled to compete.

That doesn’t mean every launch is guaranteed buyers. As more projects come to market, track record, location, payment terms, delivery timelines and future rental or resale demand will matter more, not less. For sellers and developers, the takeaway is simple: quality and pricing will count for more as buyers have more to choose from.

What this means for the rest of 2026

Around 74,100 homes are expected to complete in Dubai during 2026, with supply weighted towards apartments. Completions are currently expected to rise further in 2027, when approximately 160,700 units could enter the market.

That additional supply will not affect every part of Dubai equally.

Apartment-heavy communities with large volumes of similar stock are likely to face greater competition between landlords and sellers. Villa and townhouse supply remains comparatively limited, which should continue to support well-located family homes where demand remains strong.

For buyers and investors, greater choice will make comparison between communities, developers and property types more important. Sellers and landlords, meanwhile, will need to pay closer attention to pricing, presentation and competing supply.

“What we saw this summer was that demand is still there, but buyers are taking a more considered approach. With more supply coming through, they’re looking much more closely at location, quality and price. The best properties should continue to hold up well, but I think we’ll see a clearer gap between the parts of the market that are well positioned and those that aren’t.” 

Richard Waind, Chief Executive Officer, betterhomes