UAE real estate market navigates Q1 2026 with sustainable trajectory

Colliers’ UAE Real Estate Market Report for Q1 2026 highlighted a transition period for the market as it moves beyond the exceptional momentum of 2025 toward a more measured, mature phase, supported by strong fundamentals and ongoing infrastructure investment.

The report provided insight into key residential, office and investment trends across Abu Dhabi, Dubai, the Northern Emirates and Al Ain. Across the UAE, performance is increasingly shaped by asset quality, submarket dynamics and evolving investor and occupier behaviour.

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, while 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.

In Q1 2026, the rental market transitioned toward a more measured environment, with citywide apartment averages rising 15 per cent year-on-year, while mid-end developments exceeded 20 per cent.

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

The office market maintained strong performance, with occupancy levels exceeding 95 per cent and rents across all grades recording annual growth of between 8 per cent and 20 per cent.

In the commercial sector, primary office inventory was bolstered by the handover of Shams Tower on Al Reem Island, while the market is monitoring the imminent completion of Masdar City Square and The Link, both of which are already capturing robust occupier interest. This reflects a continuing appetite for sustainable Grade A workspace within the capital’s core business districts.

Residential transaction activity in Abu Dhabi continued to accelerate in Q1 2026, with approximately 7,800 deals recorded, reflecting a 10 per cent increase quarter-on-quarter and a 119 per cent surge year-on-year. Average apartment and villa sales prices recorded quarterly growth of 4 per cent and 2 per cent, and annual increases of 32 per cent and 21 per cent, respectively.

Dubai’s real estate market is moving beyond rapid growth into a more mature phase, well-positioned to weather short-term volatility on the back of 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, although some deliveries are expected to extend into subsequent periods.

During Q1 2026, the rental market demonstrated a robust overall performance, with quarter-on-quarter (Q-o-Q) metrics maintaining a generally positive trajectory.

Average apartment rents grew marginally by 2 per cent, 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.

The Dubai residential and commercial sales market maintained its growth trajectory throughout Q1 2026, though the period was characterised by a notable shift in sector-specific demand. Off-plan transaction volumes remained intrinsically 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 community-level variations, average sales prices trended upward across all monitored asset classes and segments, including both off-plan and secondary markets. While these increases were marginal for 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 is showing a shift from a commuter option to a destination of choice, blending affordability with more modern, community-focused living.

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

The market saw a moderation in growth in Q1 2026 as the more pronounced expansion observed over the last couple of years began to normalise. Apartment rental rates in Sharjah and Ras Al Khaimah saw marginal increases of 1–2 per cent quarter-on-quarter, while rents in Ajman, Fujairah and Umm Al Quwain remained stable.

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

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