Executive Summary

During the first months of 2026, Dubai's real estate market has entered a transition phase. After several years of strong growth, geopolitical uncertainty in the Middle East has caused a temporary slowdown in activity in both the secondary market and Off-Plan.

Strong fundamentals

The structural factors that have driven Dubai's growth remain fully in place: companies, investors, and professionals continue to choose the city.

Reduced activity

Transaction volume has declined, creating a more rational market and less competition than in previous years.

New opportunities

The slowdown is creating more favorable entry conditions for investors looking to position themselves in quality assets.

Why does Dubai remain one of the world’s most attractive markets?

While many developed economies are increasing tax pressure on companies and investors, Dubai remains one of the most competitive environments in the world for doing business and protecting wealth.

Favorable taxation

With no personal income tax or capital gains tax on real estate, Dubai offers a tax framework that is hard to match.

Legal certainty

Regulatory stability and a modern legal framework that protects the rights of investors and property owners.

Strategic global hub

A unique location connecting Europe, Asia, and Africa, making it an ideal base for companies with international operations.

Quality of life

A safe environment, world-class infrastructure, and the ability to attract highly qualified international talent.

Geopolitical Context and Market Reaction

What happened?

During the first quarter of 2026, tensions between Iran, Israel, and the United States began to create uncertainty among international investors. The direct consequences were lower transaction volumes, slower buying decisions, and a more widespread sense of caution.

We are not facing a real estate crisis. What we are seeing is a temporary reduction in activity while investors wait for greater clarity on the international context.

Why is the impact reflected in April and May?

The real estate market does not react as quickly as financial markets. Many transactions recorded in March and some in April were negotiated weeks or months before the conflict. From reservation to final registration, a considerable period can pass, especially in developments.

Headlines react in days. The real estate market reacts in months.

We are not facing a real estate crisis. What we are seeing is a temporary reduction in activity while investors wait for greater clarity on the international context.

Secondary Market | January – May 2026

The monthly trend clearly reflects the progressive impact of geopolitical uncertainty on transaction volume, while prices show a moderate correction and rental yield is on a downward trend.

Key takeaways for investors

Greater negotiating power with sellers more flexible on price and terms. (increase in supply)

Moderate correction in price/sqft: from $402 to $387, without a collapse, but indicating a trend.

Rental yield, on a downward trend, currently around 6% (7% before the conflict)

Emergence of properties below market value.

Development Market | January – May 2026

The development segment maintains a significantly higher level of activity than the secondary market, with developers continuing to launch projects and offer competitive payment plans. The correction in median price mainly reflects a change in product mix.

Key conclusions for the investor

The market remains active: more than 7,300 transactions in May, well above the secondary market.

Slower pace of launches and more flexible payment plans.

Price/sqft stable between $456–$521, a sign that underlying demand persists.

Resale of contracts at original price or below is appearing.

Better entry conditions in premium projects that were difficult to access just months ago.

Rental Market

The rental market has shown a significant slowdown, with a decline of nearly 30% in the registration of new contracts. This lower activity has started to translate into prices, which are posting average declines of 15% in certain areas and market segments.

Moderate demand

Some segments and areas are showing longer marketing times than in 2024–2025.

Greater flexibility

Landlords are showing more willingness to negotiate terms, timelines, and lease prices.

Lower profitability

The average yield on new rentals is around 6% for residential assets.

The rental market has temporarily slowed due to the regional conflict, which has led some residents to leave and professionals and families to postpone their relocation plans to Dubai, reducing demand and putting downward pressure on prices.

Why Are Opportunities Emerging Now?

Geopolitical uncertainty has led some buyers to take a wait-and-see approach. They have not lost interest in Dubai: they are simply delaying their decisions until they have greater visibility. This is creating a more balanced market with conditions not seen in years.

Less competition among buyers

Fewer buyers competing for the same assets translates directly into greater negotiating leverage and better closing terms.

Discounts and better terms

More flexible sellers and incentivized developers are offering discounts and payment plans that were unthinkable just six months ago.

Strategic positioning window

Investors with a medium- to long-term outlook now have the opportunity to enter quality assets before confidence returns to the market.

How can these opportunities be leveraged?

The market offers the chance to enter at values up to 20% below pre-conflict prices, but these opportunities must be identified and are not widespread. Acting quickly when an offer appears is a fundamental factor.

Look for assets priced below the market

The price correction in the secondary market has created real opportunities. Identifying properties with discounts of 15–25% relative to the 2025 market value allows you to enter with a margin of safety.

Prioritize completed assets or contract resales of buildings under construction.

The greatest opportunities are usually found in properties that are under construction and where investors cannot meet the payments or have been spooked by the situation.

Select developments with strong incentives

Not all developments are equal; in the current situation, it is advisable to enter developments that offer good purchase incentives. Otherwise, it makes more sense to go to the secondary market.

Maintain a medium- to long-term view

Dubai real estate cycles have shown strong recoveries after periods of uncertainty. Those entering today with a 3–5 year horizon have a high probability of capturing strong appreciation in the next cycle.

What we see from Di Salvo Realty

We are observing a more rational market, less driven by the euphoria of previous years. The temporary slowdown in activity is creating opportunities that were difficult to find a few months ago, both in the secondary market and in new developments.

Quality assets with better access

The best projects continue to attract interest, but today there are more favorable entry conditions and less competition among buyers.

The right question

The question is not whether Dubai will keep growing. The question is who will be positioned when confidence returns to the market.

A long-term perspective

Historically, the best times to invest do not usually happen when the market is at its peak, but when confidence has not fully returned yet.

Conclusion

The fundamentals remain strong

Dubai continues to attract companies, talent, and international investment. Activity has slowed temporarily, but that slowdown is creating opportunities that did not exist at the beginning of the year.

The best opportunities usually appear when the market slows down, not when it is at its peak.

What we analyzed

Geopolitical context and its real impact on the market

Evolution of the secondary market and developments January–May 2026

Status of the rental market and current yields

Concrete strategies to take advantage of the current moment

An informed decision is always a better investment

Before making any decision with your capital, it is essential to understand the market context, assess the risks, and understand where the real value is. At Di Salvo Realty we believe that the best investment is not necessarily the first opportunity that appears, but the one that fits each investor's goals, strategy, and profile.

No commitment

We invite you to a first conversation to explore options, with no pressure or obligations. Because protecting your capital is just as important as growing it.

Personalized analysis

We evaluate the available opportunities with you based on your investor profile, time horizon, and return objectives.

Access to the real market

We operate directly on the ground in Dubai, with access to assets both in the secondary market and in premium development projects.