UAE property markets cooled in Q2 2026 as Dubai home prices and rents fell, Abu Dhabi moderated and Sharjah prices declined, according to Colliers
Dubai residential prices and rents declined during the second quarter of 2026 as the UAE property market moved towards a more balanced phase following several years of exceptional growth, according to Colliers.
Average Dubai apartment and villa prices both fell 3 per cent quarter-on-quarter, while apartment rents declined 4 per cent and villa rents dropped 2 per cent. Abu Dhabi also recorded quarterly declines in prices and rents, while Sharjah and Ras Al Khaimah saw apartment prices soften, according to Colliers’ UAE Real Estate Market Report for Q2 2026.
Dubai’s residential market became more nuanced during Q2, with average prices for both apartments and villas declining by 3 per cent quarter-on-quarter.
Colliers said values generally remained more resilient than many had anticipated as the market moves towards a period of normalisation.
Conditions in the off-plan market were particularly mixed, although demand remained present and targeted.
UAE real estate
Dubai’s development pipeline also remained active, with approximately 11,650 residential units delivered during Q2.
The total comprised 9,200 apartments and 2,450 villas. A further 56,600 residential units are scheduled for completion by the end of 2026.
Major infrastructure investment is continuing across the emirate, including metro expansions, road network upgrades, new interchanges, tunnel projects and stations on the Etihad Rail network.
Dubai’s rental market also showed signs of moderation following several years of exceptional growth. Apartment rents declined 4 per cent during Q2, while villa rents fell 2 per cent.
Affordability constraints are increasingly influencing leasing decisions, according to Colliers, while a continued shift from renting to homeownership is moderating tenant demand as rental inventory increases. Leasing transactions were down a quarter during Q2 2026.
Amid growing affordability concerns, the Dubai Land Department launched the Flexi Rent initiative, allowing participating landlords to offer monthly, quarterly and semi-annual payment plans.
Dubai’s office market, however, remained a standout performer. Strong demand for off-plan Grade A developments continued to support price growth across multiple submarkets.
Abu Dhabi property prices and rents moderate
Abu Dhabi’s property market also showed signs of normalisation during Q2 following an extended period of exceptionally strong growth.
Average apartment sale prices declined 3 per cent quarter-on-quarter, while villa prices softened by 1 per cent. Despite the quarterly declines, annual growth remained strong.
Apartment sale prices were 19 per cent higher than in Q2 2025, while villa prices increased 10 per cent year-on-year. Residential transaction volumes moderated to approximately 7,200 transactions, representing an 8 per cent quarter-on-quarter decline.
Transaction numbers, however, remained 83 per cent higher than a year earlier, with off-plan sales accounting for approximately 84 per cent of the total.
Abu Dhabi apartment rents fall 2 per cent
Abu Dhabi’s residential leasing market also entered a softer phase during Q2.
Average apartment rents declined 2 per cent quarter-on-quarter and villa rents fell 3 per cent.
Larger homes and developments that had experienced the strongest recent rental growth saw the greatest adjustment.
Annual performance remained positive despite the quarterly declines, with apartment rents 7 per cent higher than Q2 2025 and villa rents up 5 per cent year-on-year.
A significant development during the quarter was the rental freeze introduced by the Abu Dhabi Real Estate Centre (ADREC) on residential and commercial lease renewals and new contracts. Lease renewals accounted for most leasing activity during Q2, reflecting lower tenant mobility.
Approximately 2,200 residential units were delivered in Abu Dhabi during the quarter across established and emerging communities.
New handovers were primarily concentrated in Al Shamkhah, including Reeman Living, Yas Island, Bloom Living in Zayed City and Al Raha Beach. Another estimated 3,200 units are scheduled for delivery during the remainder of 2026.
Abu Dhabi office demand remains strong
Abu Dhabi’s office market continued to benefit from strong occupier demand, particularly from companies seeking a presence within the Abu Dhabi Global Market (ADGM) on Al Maryah Island.
ADGM was operating at full occupancy and maintained an active waiting list, according to the report, demonstrating sustained demand for Grade A office space.
Masdar City Square, The Link and offices at Souq Al Jubail Island comprise the main near-term office supply pipeline and are expected to be delivered during Q3 2026.
Sharjah and Ras Al Khaimah property prices decline
The Northern Emirates also experienced signs of adjustment during Q2. Apartment rents declined by an average of approximately 2 per cent across the Northern Emirates, with Sharjah recording the largest adjustment at around 4 per cent.
Ajman, Fujairah and Umm Al Quwain generally proved more resilient, supported by affordability-driven demand.
In the sales market, average apartment prices in Sharjah declined 3 per cent quarter-on-quarter, while Ras Al Khaimah prices fell 2 per cent.
New project launches accelerated significantly in Sharjah, with approximately 4,600 residential units announced during Q2.
Prominent project handovers across the Northern Emirates were limited to Il Teatro Residences in Aljada, Sharjah, and the final units of Danah Bay in Ras Al Khaimah.
Northern Emirates set for 7,450 new homes
The residential completion pipeline across the Northern Emirates has moderated to approximately 7,450 units during 2026.
Sharjah accounts for the largest share, with 5,450 units, followed by Ras Al Khaimah with 1,400 and Ajman with 600.
Infrastructure investment continued to support the longer-term outlook, including the commencement of Etihad Rail passenger services between Fujairah and Abu Dhabi.
Al Ain property market remains stable
Al Ain’s real estate market remained stable during Q2, with residential, office and retail rental rates broadly unchanged quarter-on-quarter.
All three sectors continued to record positive annual growth.
Residential property remained the strongest-performing sector, with average apartment rents increasing 7 per cent year-on-year and villa rents rising 4 per cent.
Annual office rental growth reached 3 per cent, while retail rents were 5 per cent higher than in Q2 2025.
Colliers’ report indicates that performance across the UAE is becoming increasingly dependent on sector, location, product quality and pricing as the property market evolves towards a more balanced phase following its extended period of exceptionally strong growth.
Origin: ARABIAN BUSINESS