Dubai property can bounce back but prepare for a tough summer

Dubai property can bounce back but prepare for a tough summer | AGBI
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May 12, 2026
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EDITOR'S INSIGHT
Real Estate
Dubai property can bounce back but prepare for a tough summer
By James Drummond
April 30, 2026, 4:00 AM
philipus/Alamy
A villa on Dubai's Palm Jumeirah. The buying and selling season will realistically start in September
The announcements come thick and fast. Dubai has approved the Gold Line , a new metro route that will link some of the emirates outlying districts, both upscale – Nad Al Sheba – and less so – JVC – to the wider network and the evolving rail system.
The new metro line will be 42km long and fully underground. The scheme is welcome news for the citys residents who, until February, had been feeling the strain of a rapid influx of population and consequent overcrowding – at least on the roads. It also means that the city is growing away from the shoreline.
Elsewhere, state-backed Nakheel is accelerating construction at Dubai Islands , a huge project off the coast of Deira, the old heart of the city.
And the same developer has also awarded contracts worth nearly $1 billion on Palm Jebel Ali , another large – and much delayed – scheme first announced in 2002.
Our projects are moving ahead and work will not stop. On the contrary, the pace will accelerate. We remain committed to a clear development agenda, Sheikh Mohammed bin Rashid, ruler of Dubai, said last week .
Sheikh Mohammed has committed the emirate to becoming the worlds best place to live by 2040 .
Meanwhile offplan sales, a major driver of the property market in the Arabian Gulfs commercial capital, are also holding up, perhaps surprisingly. The latest data for the emirate shows nearly 10,000 transactions in March, down a scant 2 percent compared with the same period last year.
So, business as usual? Not exactly.
Within the first two weeks of the war, AGBI reported that Dubai off-plan developers were offering discounts of as much as 10 percent and flexible payment terms to draw investors. This is sensible.
Moreover, the number of new rental contracts in Dubai dropped by more than a third in March and rents themselves also fell, though some areas proved more resilient than others, Josh Corder reported .
Anecdotally, there is a lot of empty property around. Expatriates who were due to come have put the move off while they await the outcome of events. The restaurant and hotel sectors are feeling pain. Workers have been furloughed. And the international airlines, locally based carriers aside, are staying away on the instructions of their insurers.
Further reading:
Dubai off-plan: What are people buying and where?
Dubai Properties awards $300m Villanova contract
Why Dubai property flipping is becoming trickier
We are now entering the long summer months and a lull in transactions. Realistically, we are looking at September 1 for the start of the buying and selling season.
However, the situation in the Strait of Hormuz remains uncomfortable.
Certainly, Dubai and its fellow emirates have been here before. In 2020, the year of the Covid-19 pandemic, sales volumes fell 10 percent year-on-year while values fell 9.5 percent, according to analytics website DXB Interact.
But by 2021, volumes hiked 76 percent and prices shot up 111 percent.
The city famously bounced back aided by the introduction of the golden visa and then an influx of Russians and Ukrainians looking for a haven from conflict.
Dubai is also considering more changes to the golden visa and residency procedures for property investors, reducing the amount they need to spend and loosening rules, according to Megha Merani .
There are other upsides. Dubai is becoming affordable again after becoming decidedly less so during the past 12 months. Last year, Swiss wealth manager Julius Baer placed the city seventh in the world for cost of living ahead of Paris, New York and Milan.
The Deutsche Bank Research Institute also found that Dubai was one of the top 10 most expensive cities for renting a three-bedroom apartment .
And UBS accorded the emirate the steepest increase in its real estate bubble risk index among nearly two dozen global cities.
So a recalibration is welcome although, looking at the situation in Iran, the challenges are not like those of Covid.
Dubais dynamism, low-tax status and world class infrastructure are strong draws and are likely to remain so. But the short term outlook for the property market is not positive. It may be a good time to do that large-scale kitchen refurbishment you were planning.
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