UAE Real Estate Growth Driven By Population Surge And Investor Confidence

(MENAFN- Khaleej Times) The UAE's property market will continue its upward momentum due to sustained population growth, strong end-user demand, low-tax and business-friendly framework, mature regulations and ongoing supportive factors, experts say.

The latest Property Finder survey findings disclosed that seven in 10 residents plan to buy property in the UAE in the next six months, signalling continued confidence in the rising real estate market.

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“Seven in 10 people planning to buy is a powerful signal. It shows that confidence in Dubai's property market remains deeply rooted, driven by the city's global appeal, regulatory maturity and long-term fundamentals. Buyers may be price-aware, but they are not on the sidelines. Momentum is firmly carrying into 2026,” according to Cherif Sleiman, Chief Revenue Officer at Property Finder.

Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, said the UAE's property market sustained its growth momentum for the fifth consecutive year.

“The ValuStrat Price Index (VPI), a valuation-based measure tracking real capital values, revealed that Dubai's residential market recorded annual capital gains of 21.3%, primarily driven by continued demand for villas. However, growth has begun to moderate as affordability ceilings are tested and concerns due potential oversupply emerge,” Tuaima told BTR.

In Abu Dhabi, he said market dynamics have shifted in favour of apartments, with quarterly capital gains accelerating and the Abu Dhabi VPI rising 10.5% yearly. Meanwhile, Ras Al Khaimah's residential market also maintained a strong trajectory, with its VPI increasing 14.9% annually, led by faster growth in apartment valuations compared to villas.

“In 2025, off-plan sales activity reached record levels, accounting for as much as 80% of total residential transactions. In contrast, secondary or ready-home sales have recently declined, likely reflecting a rise in owner-occupier purchases,” he said.

Looking ahead, Tuaima said construction delays are anticipated due to elevated costs and a shortage of contractors. Historically, only about half of the scheduled project completions are delivered on time.

“With sustained population growth and strong end-user demand, the market is poised for another positive year in 2026. However, headwinds such as affordability constraints and supply-side pressures are expected to result in a period of moderated growth and overall stabilisation,” he said.

Dh1 Trillion Property Transactions Annually

Walid Al Zarooni, CEO of W Capital, one of the pioneers in leveraging social media to educate real estate audiences, said the real estate market is on track to achieve the Dubai Real Estate Initiative 2033 target, which aims to achieve Dh1 trillion transactions annually, especially after sales exceeded Dh919 billion last year. He said the next phase prospects show increased focus on sustainable and smart projects, with rising demand for integrated communities that combine quality of life with investment returns.

“The Dubai real estate market will continue recording balanced performance during 2026, supported by the continued influx of foreign investments, stable legislation, and growing genuine demand for homeownership,” Al Zarooni expects.

Referring to W Capital latest report, he said Dubai's property market sales have surpassed Dh2 trillion over the past five years, reflecting strong demand and improved investor confidence.

“Dubai's real estate market continues to maintain strength and annual growth, benefiting from ongoing supportive factors, mature regulations governing the sector, and proactive regulatory bodies that address local and international developments with decisive and swift decisions that stimulate real estate investment,” Al Zarooni said.

Global Interest Rate Impact

Nikita Kuznetsov, CEO at Metropolitan Premium Properties, said global interest rate cycles will continue to influence buyer behaviour, particularly mortgage-led demand. With the dirham pegged to the US dollar, UAE interest rates closely track US Federal Reserve policy. The Fed has signalled gradual easing rather than sharp cuts, which should support affordability while limiting excessive leverage. However, the UAE market remains well insulated compared to other countries, supported by a diverse mix of cash buyers, long-term investors, and end users that helps absorb short-term rate changes.

“Non-oil economic growth is expected to remain the dominant engine of the UAE economy into 2026 and beyond, driven by sectors such as technology, logistics, tourism, healthcare, and education. These sectors generate sustained, salaried employment, which directly feeds housing demand across both sales and rental markets,” Kuznetsov told BTR.

While regional developments can affect sentiment temporarily, he said the UAE's stability and regulatory clarity are expected to continue underpinning long-term confidence.“Against a backdrop of global uncertainty, the country's position as a neutral, business-friendly hub will support capital inflows, business relocations, and sustained demand from high-net-worth individuals.

“Supply absorption is expected to be a defining local factor in 2026. The sector is responding with more disciplined development pipelines, phased launches and a stronger focus on quality, differentiation and liveability.”

Mark Phoenix, CEO of Sankari, said the UAE real-estate sector is entering a phase of evolution rather than simple expansion and several macro and geopolitical factors will shape how we adapt.

First, the UAE's continued diversification away from a purely oil-based economy supports real-estate resilience: as non-oil growth, tourism, fintech, logistics and renewable energy sectors expand, so too does demand for new homes, offices and mixed-use space. Analysts forecast GDP growth of around 4-6% in coming years in Dubai, supporting housing demand.

Secondly, the level of political stability in the Middle East and the global economy will influence how confident investors feel. The UAE has positioned itself as a safe-haven destination; a stable currency peg, favourable regulatory regime, and strong governance make it attractive to foreign capital. That said, global inflation, rising interest rates and supply-chain pressures must be managed.

“Third, supply dynamics matter, We're seeing a large number of homes scheduled for delivery in 2025-27, which could lead to moderation in certain segments For Sankari, the preparation means we're focusing on quality, long-term value rather than short-term flips. We're prioritising sustainable design, flexible usage, and strong location fundamentals,” Phoenix told BTR.

Luxury, Branded Residences Demand

Kuznetsov said demand in the ultra-luxury space continues to outpace supply, particularly in the $10 million plus segment and ultra-luxury transactions in 2026 are expected to increase by around 10–20% compared to 2025. While this segment represents a relatively small share of total transactions, it accounts for a disproportionately large share of overall market value, reinforcing its structural importance.

“A key driver of this demand is the continued influx of high- and ultra-high-net-worth individuals relocating to Dubai. Shifts in global tax and regulatory environments are prompting many to reassess their base, while Dubai's stable, low-tax and business-friendly framework, combined with long-term residency options and lifestyle security, continues to attract long-term capital,” he said.

Kuznetsov said demand will remain concentrated in ultra-prime villas, penthouses and beachfront homes, where true scarcity exists. Established locations such as Palm Jumeirah, Emirates Hills and Dubai Hills Estate are expected to remain dominant, alongside emerging ultra-prime destinations like Palm Jebel Ali and Dubai Islands as the city's growth expands.

“At the same time, while luxury drives value, broader market growth will increasingly be supported by more affordable and sustainable housing solutions to meet population and employment growth, creating a more balanced and resilient market overall.”

Echoeing the similar views view, Phoenix said the surge in luxury and branded residences is very real.“Prime locations in Dubai are still scarce, and demand from high-net-worth individuals remains strong. So absolutely yes, this momentum will continue in certain ultra-prime segments. But what we're increasingly seeing is a shift in focus as well: more buyers, especially younger families and expats, are asking for sustainable homes, well-connected communities and value-for-money across mid-market segments.”

“With many expats moving to the country, I believe the next wave will focus on mid-market housing not in the sense of being 'basic', but rather in the form of smarter, future-ready communities. Think well-located, well-designed homes that meet real lifestyle needs. The branded luxury trend doesn't go away, but it becomes one part of a broader mosaic: luxury + mid-market. The smart move in 2026 will be to balance all rather than betting everything on just one.”

Tech Reshaping the Landscape

Phoenix said technology is no longer a 'nice to have' in real estate it's increasingly a must-have.“With the UAE's push towards smart cities and digital transformation, we're seeing technology reshape everything from development to investment to the buyer journey. At Sankari, we are proactively aligning with these advancements,” he said.

“For our flagship building Regent Residences Sankari Place, we are actively integrating the facets of WELL certification within our design and development process. This prestigious certification is the world's first international building standard dedicated to human health and wellness,” Phoenix added.

From an investment perspective, technology is improving transparency, access and decision-making, according to Kuznetsov.

“Advanced data analytics and AI-driven tools are enabling more accurate pricing and market insights, while digital platforms and tokenisation initiatives are gradually increasing access and liquidity, particularly for international investors,” he said.

In development, he said smart building systems and digital planning tools are increasingly standard. Developers are integrating energy management, automation and predictive maintenance to reduce operating costs, improve efficiency and meet rising sustainability expectations.

“Buyer expectations are also evolving, particularly at the higher end of the market. Smart home features and streamlined digital processes are becoming strong differentiators. Technology that supports convenience, efficiency, and lower operating costs is an emerging consideration alongside traditional factors such as location and design,” he said.

Property Tokenisation Trending

As the UAE heads into 2026, its real estate sector is entering the year on the back of robust growth, underpinned by strong population inflows, sustained residential demand, and emerging innovations such as property tokenisation, according to Farhan Badami, Market Analyst at eToro.

“The UAE's real estate market continues to benefit from powerful structural tailwinds. Population growth remains a key driver of housing demand, while new technologies such as tokenisation are beginning to reshape how properties are bought, sold and valued across major markets like Dubai and Abu Dhabi,” Badami said.

Both Dubai and Abu Dhabi are experiencing a demographic expansion that continues to support residential demand. Dubai's population surpassed four million in 2025, with more than 208,000 new residents added over the year. This growth, driven by employment opportunities, lifestyle appeal and long-term residency initiatives, has translated into record activity levels in the property market.

“In 2025 alone, Dubai recorded property transactions exceeding Dh680 billion, representing year-on-year growth of around 30. Abu Dhabi is showing a similar pattern, with residential demand growing by approximately 5% to 6% annually, significantly outpacing the rate of new housing supply,” Badami noted.

Looking ahead to 2026, one of the key developments to watch will be the shift towards tokenisation and fractional ownership. What was once largely theoretical is now moving into practical implementation, with Dubai's Land Department launching a tokenisation pilot that integrates blockchain-based property titles into the official land registry.

“This initiative has the potential to fundamentally change how real estate is traded,” Badami said.“Tokenisation could allow investors to purchase fractional ownership in property assets with greater speed, transparency and efficiency, while also improving market liquidity over time.”

He added that sustained population growth continues to support pre-sales activity, pricing power and recurring rental income, while a more mature market environment favours well-capitalised developers with strong land banks and proven execution capabilities.

“At the same time, innovation such as tokenisation may open up new funding channels and broaden the investor base. For investors, this reinforces the appeal of established developers with meaningful exposure to residential demand in Dubai and Abu Dhabi,” Badami explained.

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