The UAE’s real estate story closed the year with confidence, powered less by oil barrels and more by people, capital and conviction. Across homes, offices, malls, hotels and warehouses, activity stayed brisk through the final quarter, underscoring how deeply diversified the market has become.
According to a new market assessment, steady non-oil expansion, population growth and a durable appetite from both local and overseas investors kept property demand on the front foot. Even as energy-sector softness trimmed headline economic forecasts for late 2025 and into 2026, the impact on bricks and mortar remained contained.
The broader outlook still leans positive. Foreign investment continues to flow, the business climate keeps improving and labour market trends remain supportive — all of which feed directly into real estate absorption and pricing.
Homes: Abu Dhabi surges, Dubai stays buoyant
Abu Dhabi turned in one of its strongest residential years on record. Transaction volumes jumped sharply, values leapt well ahead of last year, and off-plan deals dominated the market. Apartments led the charge, outpacing villas by a wide margin, while rents climbed strongly amid tight supply and expanding demand. With little immediate relief on the supply side, the capital’s housing momentum is carrying into 2026.
Dubai, meanwhile, held its upward trajectory, even as a sizeable future supply pipeline looms. Rental growth cooled on a quarter-to-quarter basis but still delivered solid annual gains. Sales prices continued to rise, reflecting sustained buyer interest and firm investor sentiment. Performance, however, has been uneven: emerging neighbourhoods have been stealing the spotlight from long-established districts.
Transaction volumes hit fresh highs, with off-plan purchases accounting for the bulk of activity — a clear signal of buyer confidence in the market’s longer-term prospects.
Offices: scarcity drives rents
Office markets in both Dubai and Abu Dhabi tightened further. Occupancy climbed to near-record levels, pushing rents higher as demand raced ahead of available supply.
In Dubai, limited new completions and a surge in requirements from regional and international firms lifted average rents sharply. Occupiers are increasingly competing for quality space, particularly in well-located business hubs, while pre-leasing activity remains strong in free zones.
Abu Dhabi followed a similar script. Occupancy edged close to full capacity, with Grade A space in financial districts especially scarce. New development initiatives are underway, signalling confidence in the capital’s long-term commercial appeal, but relief will take time to arrive.
Retail: landlords hold the line
Retail performance stayed steady, supported by population growth, strong tourism flows and resilient consumer spending. With occupancy hovering near saturation in both major emirates, landlords retained negotiating power. Prime retail rents edged higher, particularly in Dubai, while Abu Dhabi’s market showed signs of stabilisation. Limited near-term supply suggests these conditions are unlikely to change quickly.
Industrial and logistics: demand runs ahead of supply
Industrial and logistics assets continued to shine. Demand from e-commerce players, manufacturers and logistics operators kept pressure on a market already short of quality space. Warehouse rents in Dubai climbed again, and while new projects are in the pipeline, they are not expected to fully ease the imbalance any time soon.
Abu Dhabi’s industrial zones also strengthened, buoyed by rising exports, SME growth and long-term industrial policy aimed at lifting the sector’s economic contribution. Rent growth in key hubs over the past two years highlights just how tight conditions have become.
The bigger picture
While hydrocarbons are recalibrating, inflation remains contained and expected global rate cuts could add another layer of support for property activity. Across sectors, a familiar theme stands out: demand is deep, supply is selective, and confidence remains intact.
The UAE’s property market is no longer riding a single wave. It is drawing strength from a broad base — one that continues to reshape the skyline and the economy beneath it.
