**RESIDENTIAL SUPPLY: WILL 2026 SEE AN OVERSUPPLY?**
In 2025, approximately 46,700 units were delivered, in line with prior
forecasts. Looking ahead, despite higher headline projections, we expect
around 55,000 units in 2026 after accounting for construction progress
and potential delays. While over 490,000 units are under construction
and announced for delivery between 2026 and 2030, realisation rates are
expected to be materially lower, with timelines constrained by contractor
capacity, supply chain challenges, and execution risks. Supply risk is
concentrated, with nearly 45% of under-construction stock across five
areas: JVC/JVT, Dubai South, MBR City, Business Bay, and Dubailand
Residence Complex. Around 67% of upcoming supply comprises studios
and one-bedroom units, elevating oversupply risk for smaller units in high
delivery districts. The pipeline is also apartment-heavy, with over 86% of
units under construction being apartments versus an existing market split
of 80% apartments and 20% villas, sustaining demand and pricing
resilience for villas and townhouses.
**SALES PRICES: GROWTH NORMALISES HEADING INTO 2026**
City-wide residential sales prices rose 13% YoY in 2025, extending the
growth cycle at a slower pace than the 2024–2025 peak and signalling a
stabilising market heading into 2026. Villas continued to outperform
apartments, with prices up 15% YoY versus 12%, supported by end-user
demand for larger formats and limited supply in established communities.
Prime locations continue to command the highest pricing across both
segments.
**RENTS: GROWTH MODERATES AMID MARKET REBALANCING**
While rental growth remains positive, extending nearly 20 consecutive
quarters of increases, the residential market is clearly moderating. City
wide rents rose just under 6% YoY in 2025, with several locations now
recording flat or negative quarterly movements, signalling a shift toward
more balanced conditions. Performance has become increasingly
segmented. Select prime villa communities continue to outperform, while
others have recorded more measured growth or rental corrections,
reflecting affordability limits and rising tenant choice.