A report issued by ValuStrat forecasts that Dubai’s office real estate sector will achieve growth of 15% by 2026, compared to an expected growth of 10% in the residential real estate market, as the market enters a more stable phase following years of rapid increases.
The report indicated that residential rents are expected to witness overall stability, reflecting a slowdown in the leasing cycle and increasing pressure related to tenants’ affordability. In contrast, capital values and office rents are likely to rise by approximately 15%, driven by corporate expansions and the scarcity of premium office spaces in prime locations.
Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, confirmed the continuation of economic factors supporting Dubai’s real estate market through 2026, with expectations of mixed performance across different sectors.
He pointed to a slowdown in overall housing price growth, while villas continue to outperform apartments due to the uneven supply-demand structure supported by a luxury lifestyle. In the office sector, the gap between demand for prime locations and new supply remains the main factor supporting the rise in rents and capital values.
Regarding the residential sector, the report expects housing prices to continue rising in 2026, with the performance gap between villas and apartments widening. Villa and townhouse prices are forecast to increase by 17.7%, compared to a relatively modest rise of 7.4% for apartment prices.
The report believes demand for standalone homes will remain the strongest, especially as they account for less than 20% of Dubai’s total residential stock. Nevertheless, future projects are heavily skewed toward apartments.
As for residential supply, around 131,234 housing units are expected to be delivered in 2026, comprising 81% apartments and 19% villas and townhouses. However, ValuStrat warned that actual figures may be revised due to ongoing changes in construction schedules. Transaction volumes are also expected to decline as the pace of new off-plan project launches slows compared to previous periods.
With regard to residential rents, the report forecasts that increases will stabilize during 2026 under the base-case scenario, as rental markets become more influenced by affordability issues, changing tenant preferences, and the balance between new supply and evolving household patterns.
As for the office market, supply is expected to remain constrained, particularly in key sub-markets, supporting continued growth in capital values and rents. ValuStrat expects a 15% increase in office capital values and rents during 2026, albeit at a slower pace than the previous year.
According to developers’ estimates, around 153,122 square meters of leasable office space are expected to be delivered during the same year, bringing Dubai’s total office stock to approximately 9.94 million square meters.
