A strong start - January 2026 sets the pace for the UAE property market in 2026

Property market updates | 19.02.2026 | Leanne Ruscoe

Dubai: A market that is still on the move

Dubai real estate market ended 2025 with record sales activity and a resilient price momentum, setting a strong base for the year ahead. According to multiple reports for December, residential prices rose sharply year-on-year, with data from Valustrat's Price Index showing an approx. 19.8% annual rise in overall capital values by the end of the year. This is fuelled by strong villa performance and steady apartment demand, where villas in particular recorded even more pronounced gains.​

​This also led to an increase in sales activity, with apartments leading the way and new off-plan launches contributing. Villas continued to maintain high demand for both rental and purchase. The median price for villas kept rising, showing that there is still strong demand for family-oriented neighbourhoods.​

Major trends shaping Dubai's market:

• Population growth supports housing demand: Dubai crossed 4 million residents in 2025, and ongoing migration is keeping housing demand healthy

• Rents are still rising: Average rents are expected to be around 6% in 2026, especially in some of the most popular communities where demand still remains positive.

• Demands stay strong across all segments: Off-plan residences still remain a popular selling point, with steady interest in both luxury properties and affordable mid-range options.

Mega projects and infrastructure to look for

Dubai's skyline shows no signs of slowing down. Landmark developments like Mercedes Benz City, the next phase of the Grand Polo Club, Expo City Dubai, Dubai Creek Harbour and the continuous expansion of DIFC's financial district presents the city's dual appeal ss both an economic powerhouse and a future-driven urban ecosystem. All in all, these projects considerably shows long-term growth that escalates way beyond old residential demand. ​

So, whether you’re a buyer or an investor whose focal point is capital appreciation or even a resident focusing on lifestyle mobility, Dubai’s market offers strong property ownership rights.​

Abu Dhabi: An emerging star in the UAE

Next up, Abu Dhabi's housing market has been steadily expanding. According to the latest regional reports, residential prices and rents in Abu Dhabi have increased in 2025, especially for ready homes, because there is limited new supply and growing demand.​

Abu Dhabi's property market momentum is also underpinned by its economic shift beyond oil and gas, with growth strength in finance, tourism and cultural development. Developments across Saadiyat Island, Yas Island, and ADGM are reinforcing long-term demand and backing price stability.​

​What's driving this surge:

• Infrastructure variant: There is a wide variety of investment opportunities in different areas, including Yas Island, Saadiyat, Al Reef, and Al Ghadder, where buyers are exploring options based on prices and lifestyles.

• Supply constraints: Ready villas and townhouses boosted the market for tangible, immediate-use homes.

• Strong capital appreciation: The secondary market prices and rental values have risen significantly, due to both local and global investor demand.

• Infrastructure improvements: Ongoing upgrades of Etihad Rail and the development of urban areas are increasing Abu Dhabi's attractiveness to both residents and investors in the long term.

These trends are an example of Abu Dhabi's strategic appeal, including lifestyle quality, economic diversification under Vision 2030, and a growing ecosystem that balances tourism, arts and long-term residency.​

Infrastructure & connectivity: How seamless it gets

One of the exceptional projects that is being popular is the Etihad Rail project that is all set to launch it's passenger services in 2026, connecting Abu Dhabi, Dubai and Fujairah with its routes. This is one of the UAE's most transitioning infrastructure initiatives, expected to not only reshape commuting patterns but also expand property demand as connectivity between the emirates tightens.

By decreasing travel times and integrating transport networks, Etihad Rail positions Abu Dhabi as both a residential and investment destination with increased accessibility, a prime factor that can push activity beyond classic city boundaries as travel habits tend to grow.​

Ras Al Khaimah: A new tourism hotspot

While Dubai and Abu Dhabi are grabbing headlines, Ras Al Khaimah (RAK) is rising as a serious strategic real estate destination in 2026.​

Also, ​Ras Al Khaimah's property market is entering a new growth phase, driven by the upcoming integrated resort and casino development. Strong interest is visible across both off-plan and ready homes, particularly in coastal communities such as Al Marjan Island, Marjan Beach and Al Hamra Village.​

​Why RAK matters now:

• Lifestyle appeal: RAK increasingly attracts buyers looking for a relaxed coastal lifestyle with strong long-term appeal, a dynamic that may appeal to both end-users and yield-focused investors.
• Tourism-led momentum: With airport expansion plans underway and the upcoming casino set to boost tourism, short-term and holiday rental properties are seeing massive interest from investors.
• Lifestyle appeal: RAK increasingly attracts buyers seeking a relaxed coastal lifestyle with strong long-term growth, a dynamic that might appeal to both end-users and investors alike.​
• Limited prime supply: With inventory successfully selling out in the key waterfront zones, prices are expected to rise by at least approx 20% in 2026 , supported by a sustainable end-user and investor demand.

What lies ahead?

2026 is set to be a defining year for UAE real estate, with growth extending beyond the usual hotspots. Dubai continues to lead with scale and momentum, Abu Dhabi stands out for quality and limited supply, while Ras Al Khaimah is emerging as a new growth destination.

Whether you're a long-term investor, a homeowner, or someone exploring new markets within the UAE, Benham and Reeves is here to help you with these three prolonged landscapes that offer depth, diversity and attractive opportunities.