UAE real estate market enters balanced, sustainable growth in Q1 2026, Colliers reports
Colliers: UAE real estate market enters balanced, sustainable growth in Q1 2026 — Abu Dhabi and Dubai see strong deliveries, rising rents and northern supply.
The UAE real estate market moved into a phase of balanced, sustainable growth in the first quarter of 2026, driven by steady deliveries, continued investment and shifting tenant preferences, according to a Colliers report. The study highlights measured increases in rents, robust office demand in Abu Dhabi and a large development pipeline in Dubai and the northern emirates. Market dynamics now reflect greater emphasis on asset quality and submarket performance as key determinants of pricing and demand.
Abu Dhabi adds 1,200 units in Q1; 7,000 more expected by year-end
Abu Dhabi’s residential supply increased by roughly 1,200 units during Q1 2026, with developers on track to deliver about 7,000 additional units before the end of the year. The measured roll-out of new homes is supporting a gradual market maturation while avoiding the abrupt oversupply that can destabilize rents and prices. Colliers notes that the mix of upcoming stock includes a notable share of branded residences, signaling growing investor confidence.
Abu Dhabi rental and sales momentum shows segmented gains
Average apartment rents in Abu Dhabi rose about 15% year‑on‑year in Q1, with mid-market projects recording gains above 20%, while villa rents increased modestly by 1% quarter‑on‑quarter and 6% year‑on‑year. Residential transaction activity climbed to approximately 7,800 deals in the quarter, up 10% from the prior quarter and 119% year‑on‑year, lifting sale prices for apartments and villas by 4% and 2% quarter‑on‑quarter respectively. Annual price increases remain pronounced, with apartments up about 32% and villas up 21% compared with Q1 2025.
Abu Dhabi office market surpasses 95% occupancy and tightens prime supply
Abu Dhabi’s office sector sustained a strong recovery, with occupancy levels exceeding 95% and prime rents recording annual increases between 8% and 20% across different categories. The quarter saw the completion of Tower Shams on Al Reem Island, while tenants are awaiting further Grade‑A deliveries in Masdar City and The Link. Demand continues to favour sustainable, well‑specified office space in central commercial districts, supporting rental resilience.
Dubai deliveries exceed 10,000 apartments for a second month; large pipeline persists
Dubai continued to record high delivery volumes, with more than 10,000 apartments handed over for the second consecutive month and around 1,900 villas delivered in Q1 2026. The emirate’s development pipeline remains substantial, with Colliers projecting roughly 65,000 apartments and 12,500 villas due for completion by year‑end. Developers’ focus on timely handovers and varied product tiers is helping to meet demand while allowing the market to digest new supply.
Dubai sales and office transactions buoyed by limited completed stock
Sales activity in Dubai maintained an upward trajectory during Q1 as average sales prices rose across both primary and secondary markets, supported by sustained buyer interest. The office sales market saw notable growth, a trend Colliers attributes to a shortage of completed office assets relative to demand despite a gradual expansion of new Grade‑A supply. Investors and occupiers are prioritising completed, high‑specification assets which has pushed transactional momentum in commercial segments.
Northern Emirates transition into integrated residential destinations; Sharjah leads new listings
The northern emirates are evolving from commuter suburbs into self‑sufficient residential destinations, combining competitive pricing with modern, community‑oriented developments. Sharjah led new supply with about 1,700 newly released units in the quarter, followed by Ras Al Khaimah, Ajman and Umm Al Quwain, while deliveries across major projects exceeded 1,100 apartments and 320 villas. Quarterly rental movements were modest, with Sharjah and Ras Al Khaimah seeing 1–2% increases and stability in Ajman, Fujairah and Umm Al Quwain.
Al Ain continued to post steady, locally driven demand, supporting rental growth across core corridors and retail nodes.
Average apartment and villa rents in Al Ain rose by approximately 7% and 2% respectively year‑on‑year, reflecting consistent local demand and limited speculative volatility. Office rents outside the central business district remained broadly stable, while retail rents across the city climbed about 5% annually, with Khalifa Street and the main thoroughfare recording the strongest increases. These patterns underscore the role of domestic occupancy and targeted supply in maintaining market balance.
Looking ahead, Colliers highlights that the UAE real estate market’s near‑term trajectory will be shaped by the pace of remaining 2026 deliveries and continued investor focus on asset quality and sustainability. Policymakers and developers face the task of aligning new supply with occupier preferences to sustain rental growth and transaction momentum across emirates. The report suggests that measured roll‑outs and differentiated product strategies will be critical for preserving stability as the market normalises following the exceptional activity of 2025.