Dubai luxury property prices up by 4%, with rentals jumping 16%

Dubai: Dubai’s luxury residential property market continued to show price resilience during the third quarter of 2026, coinciding with a recovery in rental activity. A recent report by global real estate consultancy Savills showed that luxury apartment prices rose by 4% year-on-year, while luxury villas and townhouses recorded growth of 3.6%, while the number of residential rental transactions increased by 16% compared to the previous quarter. According to the Dubai Residential Real Estate Market Report for the third quarter of 2026, the average price per square foot for luxury apartments was AED5,237, compared to AED2,791 for luxury villas and townhouses. The report indicated that the luxury housing market maintained its stability despite the decline in transaction volumes, reflecting the continued resilience of residential values in this segment. Elite market The third quarter saw a number of notable deals in the luxury real estate market, led by the sale of a villa in Palm Jumeirah for AED260 million, followed by a villa in Hills View in Dubai Hills Estate for AED252 million, while Aman Residences recorded the sale of an apartment for AED166 million. The number of residential transactions with a value exceeding AED10 million reached 669 during the third quarter of 2026. Leasing sector In the rental market, activity rebounded during the third quarter, with the number of rental transactions rising by 16% quarter-on-quarter to 181.9 thousand transactions, compared to 156.2 thousand in the second quarter, keeping activity close to the level of the third quarter of 2025, which was 180.6 thousand transactions. The share of new leases rose to 44% during the third quarter, compared to 36% in the second quarter, supported by strong new leasing activity in several key areas, including Business Bay, Jumeirah Village Circle, Jumeirah Village Triangle Towers, and Downtown Dubai. Regarding new apartment leases, Majan recorded a 1.3% quarter-on-quarter increase during the third quarter. The report indicated that limited quarterly movements in the surveyed areas show initial signs of stabilising rents, although performance remains uneven across different areas. Ready market The report showed an improvement in the activity of ready properties during the third quarter, as the value of its transactions rose to AED25.1 billion, compared to AED21.3 billion in the previous quarter, which, according to Savills, indicates a relatively stronger momentum in completed properties. In contrast, the total value of residential transactions in Dubai during the third quarter reached AED70.8 billion through 34,500 transactions. The top five real estate development companies accounted for 47.9% of total transactions, while the top five regions accounted for 33.7%, which the report considered an indication of continued strong activity in selected projects and locations rather than its even distribution across the market. Positive sign The report highlighted the AED1.5 billion RAW District 2 project by Imtiaz, noting that the project was sold out on its launch day during the third quarter. The project is located within the Sheikh Zayed Road and Jebel Ali axis, indicating strong demand from investors in the market. Regarding supply, Savills reported that only about 5,000 residential units were launched during the third quarter, bringing the total number of units launched since the beginning of 2026 to about 50,000. It noted that developers are taking a more selective approach to launching projects, with a greater focus on product development, reassessing prices and target buyer segments before launching projects. Savills predicted that fewer launches and delayed deliveries would help reduce supply pressures in the near term, while expecting improved transaction activity as the project launch schedule strengthens.