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Dubai luxury and UAE real estate market expansion

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2026-08-22 00:12 UTC → 2026-08-26 14:48 UTC · added ~~removed~~

Dubai’s real estate and luxury sectors continue to demonstrate significant growth and resilience. In the second quarter of 2026, the office market saw Grade A demand keep rents steady, with leasing activity rising 4% year-on-year as tenants favored smaller, high-quality units. The residential sector has reached new milestones. Off-plan sales accounted for 71% of the 87,800 transactions in the first half of 2026, valued at AED 291.7 billion. Average prices rose 9%, and 296 homes priced above $10 million generated $5.1 billion in sales. Demand for new construction remains exceptionally high; of the 564,072 residential units currently under construction, 75.5% have been sold, with villa absorption reaching 85.4%. For homes scheduled for delivery in 2026, the absorption rate is 82.9%, with some communities reporting 100% absorption. Furthermore, 104 real estate projects valued at AED 111 billion were completed in the first half of 2026, marking a 52% increase in investment value compared to the previous year. This real estate momentum is supported by rapid demographic shifts. Dubai’s population reached 4.58 million by the end of 2025, following a 31.7% increase over five years. This growth was largely driven by the expatriate population, which rose from approximately 3.2 million in 2021 to 4.27 million in 2025. Parallel to property, the high-end consumer market remains robust. Luxury car rentals have become a standard expectation for visitors, while the fashion industry—projected to reach US$41 billion by 2029—continues to drive economic activity. Meanwhile, an informal market in Deira persists, selling counterfeit luxury goods. Recent developments indicate the broader UAE market is entering a more balanced phase. In Abu Dhabi, the market is showing signs of normalization; while apartment sale prices rose 19% year-on-year and villa prices increased by 10%, residential leasing saw slight quarterly declines.

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