Dubai’s real estate market demonstrated significant recovery in May, extending the positive momentum that began in April and highlighting the sector’s resilience amid ongoing geopolitical tensions in the Middle East. Following a temporary slowdown in March linked to regional instability, investor confidence swiftly returned as international travel normalised and buyers completed transactions that had been delayed.

According to data from the Dubai Land Department, weekly real estate transactions consistently surpassed Dh14 billion during May, with some weeks nearing Dh15 billion, underscoring robust demand. Off-plan developments continued to dominate sales, while luxury waterfront properties and branded residences remained key attractions for buyers.

This rebound suggests that Dubai’s property market is moving past the uncertainty that subdued activity earlier in the year and entering a phase of steadier growth driven by stronger market fundamentals rather than speculative buying. Market activity in April had already indicated an upward trend, with total transactions reaching 13,799—an increase of 3 percent month-on-month—and sales value rising 9 percent to Dh47.2 billion.

Internal brokerage figures from Allsopp & Allsopp reflected sharp increases in market engagement in April, including a 198 percent surge in viewing activity from one week to the next, a 147 percent rise in buyer inquiries, and a 98 percent jump in completed transactions. Mortgage applications surged as well, marking one of the clearest signs of renewed buyer confidence. More mortgage submissions were recorded in the first eight days of April than in the entire month of March, and the first half of April saw a 250 percent week-on-week increase in new submissions.

Century Financial’s chief investment officer, Vijay Valecha, identified March as the likely low point of the recent cycle, noting that the swift recovery in April represented a decisive turnaround. He emphasized that capital outflows during the regional unrest were temporary pauses rather than permanent withdrawals, pointing to sustained foreign investment in Dubai’s property market.

Foreign buyer activity remained strong through the first quarter of 2026, with the value of foreign property transactions rising nearly 26 percent year-on-year and the number of foreign deals increasing by 11 percent to 48,445. Investors from Europe, Asia, and other regions continue to favour Dubai for its attractive yields, tax advantages, and economic stability.

The luxury sector performed notably well in May, with several high-value transactions including a Dh112.6 million residence at Solaya 5 in Jumeirah First, an Dh83.2 million home at Aman Residences, and a Dh56.5 million property at Como Residences, underscoring sustained interest from high-net-worth individuals despite geopolitical uncertainties.

Off-plan properties remained the principal growth driver, accounting for 76 percent of sales in April and maintaining strong momentum in May. Developer confidence is reflected in significant commitments such as Meraas’s Dh2.4 billion construction contracts for expanding The Acres villa community in Dubailand.

Market analysts have noted a moderation in price growth, which is seen as a positive step toward a more balanced and sustainable market environment. Annual price appreciation is estimated between 8 and 12 percent, a deceleration from the rapid increases seen in the post-pandemic period. The REIDIN-DLD citywide average sale price reached Dh1,973 per square foot in April, up 3 percent month-on-month and 8 percent year-on-year, while the ValuStrat Price Index showed a 5.9 percent monthly decline in March but maintained an annual increase of 8.9 percent.

Developers are adapting to evolving buyer preferences with more selective purchasing criteria focused on quality, location, infrastructure, rental yield, and developer credibility. Incentives such as fee waivers, reduced upfront payments, and flexible payment plans are increasingly offered to attract investors and end-users.

The broader investment climate in the UAE remains favorable, with continued inflows of institutional capital. Notably, global investment firm Blackstone committed $250 million in March to a UAE-based payments platform, signaling lasting confidence in the country’s regulatory environment and economic outlook.

Overall, Dubai’s property market in May reinforced its position as a dynamic and globally connected sector. Supported by strong population growth, increasing foreign investment, expanding infrastructure, and steady demand across luxury and off-plan segments, the outlook for the remainder of 2026 is broadly positive as the market shifts toward more sustainable growth.