Dubai’s real estate market continues to post strong performance, reflecting its growing appeal to investors and residents, as the residential sector moves closer to surpassing the one-million-unit mark. The milestone represents another significant stage in the emirate’s expanding property market and ongoing urban development.

Dubai’s residential inventory currently stands at around 977,000 units, following the addition of approximately 20,000 homes during the first half of 2026. This puts the market on track to exceed one million residential units by early 2027.

According to estimates from ValuStrat, a global multi-sector advisory firm, around 22,000 additional units are expected to be delivered during the second half of the year. Developers’ announced delivery schedules and projects currently under construction also point to a much larger pipeline in the coming years, with approximately 390,000 new units expected to be added by the beginning of the next decade.

Property market specialists believe Dubai remains well positioned to absorb the additional supply, supported by continued population growth, job creation, investment inflows, the formation of new households, and healthy occupancy levels across a number of communities.

The increase in supply could also prove positive for the market by strengthening competition among developers, expanding the range of options available to buyers and tenants, and encouraging companies to offer more flexible payment plans, better quality, and improved services.

Demand Growth

Haider Tuaima, Director and Head of Real Estate Research at ValuStrat, said: “Dubai’s residential stock in 2020 was estimated at around 693,000 homes serving a population base of approximately 3.4 million people, while the average capital value of residential property stood at around AED 866 per square foot.”

He added: “By 2025, the population had increased to approximately 4.6 million people, while residential supply had risen to 977,000 units,” noting that during the same period, average residential property values nearly doubled to around AED 1,696 per square foot, alongside significant increases in both property prices and rents.

The figures highlight the scale of growth recorded by the market within five years, both in terms of population and residential supply, alongside a sharp increase in capital values that reflects the strength of demand Dubai has experienced in recent years.

Tuaima continued: “This rise in the real estate sector placed greater focus on affordability, prompting some buyers to reduce the size of their homes or look for more suitable options, particularly in Sharjah and Ajman. Real estate developers also responded to changing affordability requirements, especially in the off-plan market, by launching smaller units at more accessible overall prices.”

Changing buyer preferences have also been reflected in the design of newly launched projects. The average size of new residential units fell to around 1,300 square feet in 2025, compared with more than 2,000 square feet in 2020.

This shift shows that developers are becoming more flexible in responding to market requirements by rethinking unit layouts and offering homes that better match different budgets, rather than relying solely on price competition.

Tuaima expects demand for residential property to continue growing in the short term, although at a more moderate pace than in recent years. At the same time, higher construction costs and challenges related to building material supplies could slow some deliveries, potentially supporting a more balanced relationship between supply and demand.

Tuaima said: “Looking further ahead, and in accordance with the Dubai Urban Master Plan, Dubai’s population is expected to continue growing. The emirate’s plans to accommodate around 5.8 million people by 2040 would require the residential stock to increase to an estimated 1.4 million homes, highlighting the scale of the substantial underlying long-term demand for housing.”

These expectations reinforce the positive outlook for the sector, with projected population growth remaining one of the most important factors supporting the need for additional residential units over the coming years.

Significant Increase

Mohammed Al Sari, CEO of HRE Development, said: “Dubai is set to see a significant increase in residential supply over the coming years,” explaining that this increase should be viewed in the context of the emirate’s continuing population and economic growth.

Al Sari noted that “Dubai continues to attract new residents, alongside an inflow of investors seeking real estate assets in a market characterized by transparency and regulatory stability.”

These factors underline the importance of viewing higher supply as a natural part of the market’s expansion, particularly as the emirate continues to attract skilled professionals, companies, and capital from both the region and international markets.

He added that “the market still has a good capacity to absorb the new supply,” noting that absorption is not determined by population growth alone. It also depends on job creation, the formation of new households, investment volumes, occupancy rates, and the locations and types of units being delivered.

Al Sari also emphasized that maintaining market balance does not depend on achieving a specific rate of demand growth relative to supply, but rather on ensuring that the pace of deliveries remains healthily aligned with the development of actual demand over the medium term.

He said: “The impact will vary clearly across different areas of Dubai,” pointing out that prime locations with strategic positioning, strong infrastructure, and projects with limited supply are likely to maintain their values and may experience further growth, supported by scarcity and location rather than by the overall supply-and-demand equation alone.

By contrast, areas experiencing a large expansion in new developments may see greater competition, particularly in the mid-market segment, potentially giving buyers and tenants more room to compare available options.

Positive Development

Al Sari said: “The entry of this volume of units will significantly increase the level of competition among developers,” describing it as “a positive development for both the market and consumers.”

He explained that the next phase is likely to bring greater flexibility in payment plans, stronger competition over the quality of finishes and shared amenities, and a reassessment of unit sizes to better meet buyers’ actual needs rather than relying on traditional layouts.

This increased competition could push the market into a new phase in which the quality of the real estate product, added value, and services become more important than price competition alone, ultimately benefiting consumers and supporting greater market maturity.

Al Sari also said that developers best positioned to succeed in this environment will be those capable of offering genuine value rather than simply competitive prices.

He described the growth in residential inventory as more of an “opportunity” than a challenge, as it reflects confidence in Dubai’s future and provides end users and investors with a wider range of choices.

He added that benefiting from this opportunity will depend on carefully managing the pace of launches and deliveries. Among the key indicators monitored by the company are occupancy rates, the market’s absorption rate for newly launched units, population and workforce growth, the volume of real estate transactions compared with new supply, and rental performance in areas experiencing high levels of new handovers.

Taken together, these indicators provide a more comprehensive picture of the market’s performance and direction than simply looking at the total number of residential units.

AED 2.63 Billion in Daily Dubai Real Estate Transactions

In another indication of continued market activity, total real estate transactions in Dubai exceeded AED 2.63 billion across 904 deals, including sales worth more than AED 1.63 billion through 696 transactions, according to data from the Dubai REST application operated by the Dubai Land Department.

The sales included 605 transactions involving residential units, 35 building sales, and 56 land transactions.

Ready-property sales reached approximately AED 692.32 million through 203 transactions, including 138 residential unit sales, nine building transactions, and 56 land deals.

Off-plan property sales totaled around AED 935.44 million through 493 transactions, including 467 residential unit deals and 26 building sales.

Mortgage transactions totaled 162 deals worth AED 653.9 million, including 95 transactions involving residential units, 21 involving buildings, and 46 involving land.

Meanwhile, property gifts were valued at approximately AED 350.63 million across 46 transactions.

Sales accounted for around 61.05% of the total value of real estate transactions, compared with approximately 25.36% for mortgages and around 13.6% for gifts.

Airport City topped the list of areas with the highest sales value at approximately AED 238.15 million, followed by Al Yufrah 1 at around AED 156.79 million, and Business Bay with AED 137.34 million.

Dubai’s City of Arabia followed with sales worth AED 103.59 million, while the Burj Khalifa area recorded approximately AED 90.73 million.

These indicators show that Dubai’s approach toward the one-million-residential-unit milestone comes at a time when the property market continues to maintain strong activity, supported by diversified demand, an expanding population and investor base, and the continued development of projects designed to respond to changing buyer requirements.