Real estate markets across the Gulf are poised to sustain strong momentum through the first half of 2026, supported by resilient economic growth, rising populations and improving liquidity conditions, with Dubai continuing to stand out globally for its high rental yields and investor-friendly fundamentals.
A latest outlook by Kuwait Financial Centre Markaz points to an accelerating phase for GCC real estate markets after robust performance in the second half of 2025, driven by steady non-oil economic expansion, infrastructure investment and expectations of a more accommodative interest-rate environment.
Higher oil production, continued government spending on development projects and anticipated policy easing are expected to improve credit availability and support investment across residential, commercial and industrial segments.
Across the region, property remains a key pillar of economic diversification strategies, particularly in the UAE and Saudi Arabia, where large-scale infrastructure, tourism and urban development projects are sustaining demand for housing and commercial space.
These structural drivers are expected to keep transaction activity and price growth on a firm footing through the first half of 2026, even as markets gradually shift towards more balanced supply-demand dynamics.
The UAE continues to lead regional real estate performance, with Dubai and Abu Dhabi attracting global investors, high-net-worth individuals and skilled professionals. Dubai recorded real estate transactions worth about Dh554.1 billion in 2025, up 28.3 per cent year-on-year, while Abu Dhabi posted Dh58 billion in sales, a surge of 75.8 per cent.
Transaction volumes in the capital also climbed more than 40 per cent, reflecting sustained demand across residential and commercial segments.
Dubai’s rental market remains a major draw for global investors, offering some of the highest yields among major international property markets. Average residential rental yields in the emirate continue to range between 6 per cent and 8 per cent in 2026, with certain high-demand districts delivering even stronger returns.
Areas such as Jumeirah Village Circle, Business Bay and Dubai South are generating gross yields of between 7 per cent and 9 per cent, while established locations such as Dubai Marina typically offer stable net returns of about 5.5 per cent to 6.5 per cent.
According to global consultancy Knight Frank, Dubai’s residential market remains underpinned by strong end-user demand and international capital inflows. Faisal Durrani, Partner and Head of Research for Mena at Knight Frank, noted: “Dubai remains one of the most liquid and transparent markets globally,” adding that strong migration and investor demand continue to support both rental and capital values.CBRE also expects the UAE property market to maintain steady growth despite signs of moderation following several years of rapid expansion.
Taimur Khan, head of Research for Mena at CBRE, said: “Population growth and economic expansion will continue to drive housing demand,” while highlighting that supply additions are being absorbed by sustained end-user and investor interest.
Population growth remains a central driver of rental demand across Dubai. The emirate’s population is projected to exceed 4 million in the coming years, supported by continued inflows of professionals and entrepreneurs drawn by economic opportunities and long-term residency incentives.
At the same time, rising property prices and mortgage qualification requirements are keeping a significant portion of residents in the rental market, sustaining occupancy levels and supporting rental growth.
While rental increases are expected to moderate to around 6 per cent in 2026 after sharp gains in recent years, yields remain highly attractive compared with global peers such as London, New York and Singapore, where average residential yields typically range between 3 per cent and 5 per cent.
Industry analysts note that smaller units such as studios and one-bedroom apartments continue to generate the highest returns, particularly in well-connected, master-planned communities.
Markaz indicates that although the UAE market may approach a cyclical peak in the first half of 2026 following several years of strong appreciation, the underlying fundamentals remain solid, reducing the likelihood of a sharp correction. Instead, a gradual moderation in price growth and rental increases is expected, creating a more sustainable and balanced market environment.
Across the GCC, real estate is expected to remain a central contributor to economic growth and investment flows through 2026. Saudi Arabia’s real estate sector continues to expand rapidly, supported by Vision 2030 investments, population growth and strong corporate activity.
Kuwait’s real estate market, though more stable, is also showing steady gains. Strong demographics, continued infrastructure spending and improving financing conditions are likely to sustain demand across sectors, ensuring that property markets across the region continue to offer attractive opportunities for investors seeking stable income and long-term value.
