UAE Real Estate Market Enters Measured Growth Phase in Q1 2026 - Report

ABU DHABI, UAE - The UAE real estate market entered a transition period in Q1 2026, moving beyond the exceptional momentum recorded in 2025 toward a more measured and mature phase, according to Colliers’ UAE Real Estate Market Report for Q1 2026.

The report highlighted continued strength across the country’s residential, office and investment markets, supported by strong fundamentals, infrastructure investment and evolving demand patterns across Abu Dhabi, Dubai, the Northern Emirates and Al Ain.

Across the UAE, market performance is increasingly being shaped by asset quality, submarket dynamics and changing investor and occupier behaviour. While growth remains positive, the pace of expansion is becoming more selective, with high-quality communities, sustainable office space and well-connected developments continuing to attract stronger demand.

Abu Dhabi Moves Toward Balanced Growth

Abu Dhabi’s real estate market is evolving toward a more balanced and sustainable growth trajectory.

On the supply side, the residential sector maintained a steady delivery rhythm in Q1 2026, with approximately 1,200 units added to the market. A further 7,000 units are scheduled for completion by year-end.

Development activity also reached record levels, with 22 new projects added to the pipeline, including nine branded residential schemes. The level of new activity reflects continued confidence in Abu Dhabi’s residential sector, particularly across communities that combine lifestyle, connectivity and long-term investment appeal.

In Q1 2026, the rental market transitioned toward a more measured environment. Citywide apartment averages rose 15 percent year-on-year, while mid-end developments exceeded 20 percent.

The residential villa segment recorded a marginal 1 percent quarterly increase and 6 percent annual growth. Notable yearly gains of 7 percent to 10 percent were sustained in high-quality communities on Yas Island, as well as in specific mid-quality developments such as Al Reef.

Abu Dhabi’s office market maintained strong performance during the quarter, with occupancy levels exceeding 95 percent. Rents across all grades recorded annual growth of between 8 percent and 20 percent.

In the commercial sector, primary office inventory was supported by the handover of Shams Tower on Al Reem Island. The market is also monitoring the imminent completion of Masdar City Square and The Link, both of which are already attracting strong occupier interest.

The trend reflects continued appetite for sustainable Grade A workspace within the capital’s core business districts, particularly as companies place greater emphasis on quality, efficiency and location.

Residential transaction activity in Abu Dhabi also continued to accelerate in Q1 2026. Approximately 7,800 deals were recorded, reflecting a 10 percent increase quarter-on-quarter and a 119 percent surge year-on-year.

Average apartment and villa sales prices recorded quarterly growth of 4 percent and 2 percent, respectively. On an annual basis, apartment prices increased by 32 percent, while villa prices rose by 21 percent.

Dubai Enters a More Mature Phase

Dubai’s real estate market is moving beyond rapid growth into a more mature phase, supported by strong fundamentals and ongoing infrastructure investment.

On the supply side, new apartment deliveries exceeded the 10,000-unit threshold for the second consecutive month, while approximately 1,900 villas were delivered during Q1 2026.

The development pipeline remains substantial, with an additional 65,000 apartments and 12,500 villas scheduled for delivery by year-end. However, some deliveries are expected to extend into subsequent periods.

During Q1 2026, Dubai’s rental market demonstrated a robust overall performance, with quarter-on-quarter metrics maintaining a generally positive trajectory.

Average apartment rents grew marginally by 2 percent, supported by sustained demand in the affordable housing segment. While average villa rates remained stable throughout the quarter, the market showed a more nuanced performance at the community level, with tenants adopting a more value-driven approach.

Dubai’s residential and commercial sales market maintained its growth trajectory throughout Q1 2026, although the period was marked by a shift in sector-specific demand.

Off-plan transaction volumes remained closely linked to the frequency of project launches and subsequent registration timelines. Activity for completed units across both apartments and villas declined quarterly, with the pace of contraction accelerating through March.

Despite variations between communities, average sales prices trended upward across all monitored asset classes and segments, including both off-plan and secondary markets.

While these increases were marginal in the residential sector, office sales demonstrated standout growth. This performance was underpinned by a shortage of completed commercial units and a limited, though gradually increasing, pipeline of new launches featuring Grade A specifications.

Northern Emirates Gain Momentum as Lifestyle Destinations

The Northern Emirates are showing a shift from being primarily commuter markets to becoming destinations of choice, combining affordability with more modern and community-focused living.

Sharjah recorded the highest number of newly launched units last quarter, with approximately 1,700 units, followed by Ras Al Khaimah, Ajman and Umm Al Quwain.

The market saw a moderation in growth in Q1 2026 as the stronger expansion recorded over the past couple of years began to normalise.

Apartment rental rates in Sharjah and Ras Al Khaimah saw marginal increases of 1 percent to 2 percent quarter-on-quarter, while rents in Ajman, Fujairah and Umm Al Quwain remained stable.

Project deliveries showed strong initial momentum, with more than 1,100 apartments and 320 villas completed across key master-planned communities, including Aljada, Sharjah Sustainable City and Al Zahia.

The report said the 2026 delivery pipeline remains substantial at approximately 12,000 units.

Al Ain Supported by Locally Driven Demand

Al Ain’s property market continues to be shaped by steady, locally driven demand, supporting consistent performance across sectors.

In Q1 2026, the market demonstrated a mixed performance, with average apartment and villa rental rates rising by 7 percent and 2 percent year-on-year, respectively.

In the office market, rents across non-CBD locations remained broadly unchanged. Overall performance was supported by appreciation along Khalifa Street and Main Street, which recorded year-on-year increases of 1 percent and 6 percent, respectively.

The retail segment followed a similar trend, with citywide rents rising by 5 percent annually. The strongest growth was observed along the Khalifa and Main Street corridor, where rents increased by around 8 percent.

The findings point to a UAE real estate market that remains resilient, but increasingly selective. As the sector moves through 2026, performance is expected to be driven less by broad-based momentum and more by location, quality, infrastructure access, occupier demand and the ability of projects to respond to changing buyer and tenant expectations.