Dubai property sales have fallen 16%—so why are home prices still rising?

Dubai's residential real estate market witnessed a slowdown in transaction activity during the first half of 2026, with housing sales declining 16 per cent year-on-year. However, property prices continued to climb, highlighting the market's resilience despite geopolitical tensions across West Asia.

Residential property transactions in Dubai totalled AED 225.7 billion during January-June 2026, compared with AED 267.8 billion recorded in the same period last year. While the overall value of transactions declined, the market continued to attract investors, supported by Dubai's strong economic fundamentals and its reputation as a global investment destination, according to ANAROCK.

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Prices continue to rise despite slower sales

Even as transaction volumes eased, residential property prices increased by approximately 6 per cent during the first half of the year. ANAROCK attributed the price growth to sustained demand for premium properties, limited supply in key locations, and continued interest from international investors.

The consultancy noted that geopolitical uncertainty in the Middle East temporarily affected buyer sentiment, prompting some investors to adopt a wait-and-watch approach. However, the correction in sales activity has not translated into a significant fall in prices, reflecting the market's underlying strength.

Geopolitical tensions 

According to ANAROCK, escalating geopolitical tensions in West Asia, particularly concerns surrounding regional conflicts, led to greater caution among homebuyers and investors during the first half of the year. The uncertainty affected transaction momentum, especially during periods of heightened regional instability.

Despite these challenges, the consultancy said Dubai's property market has historically demonstrated an ability to recover quickly from global and regional disruptions, thanks to its diversified economy, investor-friendly regulations, and strong demand from overseas buyers.

Quality investments

Buyers are becoming increasingly selective, with demand shifting towards high-quality developments offering better amenities, prime locations and long-term value, as observed by ANAROCK. This change reflects a more mature market where investors are prioritising sustainable returns rather than speculative gains.

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The report suggested that while transaction volumes may remain moderate in the near term if geopolitical uncertainties persist, Dubai's real estate sector is expected to remain fundamentally strong due to continued infrastructure development, favourable government policies and robust international demand.

Outlook remains positive

Industry experts believe Dubai's residential market is entering a phase of more balanced growth after several years of rapid expansion. Although sales activity has moderated, rising property values indicate that demand continues to outpace supply in several high-demand segments.