Dubai property market, October 2026

All figures are documented on this page; the sources are listed at the end of the page.

Rates: the first rise of the cycle

Official rule On 16 September 2026 the Federal Open Market Committee voted 12 to 0 to raise the target range for the federal funds rate by a quarter point to 3.75 to 4.00 per cent.^[3] The UAE dirham is pegged to the US dollar at 3.6725, so the UAE Central Bank does not run its own interest cycle. In its published series the Base Rate moved from 3.65 to 3.90 per cent from 18 September 2026, and the rate for borrowing through its standing facilities moved from 4.15 to 4.40 per cent, 50 basis points above the Base Rate.^[1]

For mortgages the rate that counts is EIBOR, the interbank rate the central bank publishes every business day.^[2] The market had priced the rise in before it happened: the three-month fixing climbed from 3.99 per cent on 1 September to 4.37 per cent on 22 September, a move of almost 0.4 points in three weeks, more than the policy rise itself.

Source: UAE Central Bank, EIBOR rates, rounded to two decimals.^[2]

Prices: off the peak, but not evenly

The residential price index peaked at 220.25 in January 2026. In August it stood at 207.02, 6.0 per cent lower and 2.44 per cent below August 2025.^[5] That is the first year-on-year decline since 2021. An independent measure points the same way: Cavendish Maxwell put the average at AED 1,636 per square foot in August, 1.7 per cent below a year earlier, and also called it the first annual decline in five and a half years.^[6] Two different data sets, the same direction, a similar size.

Index base January 2012 = 100, Dubai Land Department registrations modelled by PropertyIndex.^[5] A note on this index. PropertyIndex restates the whole series with every monthly delivery as late registrations arrive. This edition uses the delivery through August 2026 throughout, so single months can differ slightly from our September edition. Neither figure was wrong when it was written; the newer delivery is the one to use.

Three things stand out. First, completed homes rose in August while everything else slipped, and they are the only segment still above last year. Second, both main segments are a similar distance from their own peaks, 4.4 and 4.9 per cent; what separates them is direction, not depth. Third, the premium for off-plan has not closed: at the median a square foot of off-plan still costs 26.0 per cent more than a finished one. The medians mix areas, building ages and unit types, so read that as where the premium in the market sits, not as a like-for-like discount.

Volumes: fewer deals, more completions

Registered residential sales in August 2026 came to 10,667, against 16,956 in August 2025, 37 per cent fewer.^[5] Cavendish Maxwell counted close to 10,900 homes worth AED 23.4 billion in the same month, with more than 75 per cent off-plan.^[6]

Source: PropertyIndex, registered sales supporting the index.^[5] Changes and shares rounded, derived from the counts.

The fall is concentrated in off-plan. A year ago eight in ten residential sales were off-plan; in August 2026 it was fewer than eight in ten, and the completed share edged up. That fits the price picture: the part of the market that runs on launches and payment plans is cooling fastest, the part that runs on finished homes and bank finance is steadier.

Perspective matters here. 2025 was the strongest year the market has recorded, with transactions of more than AED 917 billion.^[11] 2026 kept that pace into the spring: AED 252 billion in the first quarter, 31 per cent more than a year earlier,^[8] and AED 419.94 billion across 112,850 transactions in the first half.^[7] What August shows is a market coming down from a record, not one running out of buyers.

Supply is arriving at the same time. In the first half of 2026, 104 projects with 24,537 units were completed, against 75 projects a year earlier, an increase of 38.7 per cent.^[9] Every completed unit moves from the off-plan world into the segment a bank can finance. For a buyer that means more choice among finished homes, and for a seller more competition.

Rents

The latest official quarterly rental figures are for the first quarter of 2026: tenancy contracts worth AED 32.2 billion, with 135,607 renewals against 118,385 new contracts and cancellations down 25 per cent.^[10] More renewals than new lettings describe tenants staying put. With purchase prices 6.0 per cent below peak and rents holding, the arithmetic of the gross initial yield improves: at an unchanged rent, 6.0 per cent on the peak price becomes about 6.4 per cent on today's. That is arithmetic, not a forecast for any single property.

What the rise costs, calculated

Official rule The Central Bank's mortgage regulations cap the term at 25 years and total debt service at 50 per cent of income; loan-to-value for non-residents is set by each bank, usually 65 per cent, sometimes 50.^[12] The price of the loan is EIBOR plus the bank's margin.

Worked example A completed apartment at AED 1,800,000, loan of AED 1,170,000 over 25 years

Annuity, monthly payments, rounded. The rates are illustrations of EIBOR plus a margin, not an offer; each bank sets its own margin.

The rule of thumb. Each quarter point costs about AED 154 a month per AED 1 million borrowed, about AED 46,000 over 25 years. That is real money, but set it against the price side: on the same AED 1,800,000 home, one per cent off the price saves AED 18,000 at once and reduces the loan as well. In a market 6.0 per cent below its peak, the negotiation is worth more than the rate move.

The income test tightens slightly. Because the debt-service cap is a share of income, a higher instalment raises the income a bank needs to see. At AED 7,720 a month the instalment alone requires at least AED 15,440 of gross monthly income, before any other loan you already pay.

What to do in October

1. Ask for the reset date, not only the rate. In any offer letter, find when the rate first resets and what it resets to. The first years are advertised; the reversion rate governs most of the term. Our guide to EIBOR, margin and reversion explains the lines to read.
2. Decide fixed or variable deliberately. After a first rise, a fixed period buys certainty for a few years at a price. Compare the fixed rate with today's EIBOR plus margin, and ask what happens at the end of the fixed period.
3. Negotiate on the price, in the segment you can finance. Completed homes are steadier, but the market is not rushing. The bank lends against the lower of price and valuation, so a disciplined price also protects your equity.
4. Get a pre-approval before you view. It fixes what the bank will lend on your profile, and with rates moving it tells you what the instalment really is. Start with the non-resident mortgage guide.
5. If you hold off-plan, plan the handover now. A bank only lends at completion, on the rates of that day. Our page on financing the handover payment shows how to prepare.

What we are watching

• 27 and 28 October 2026: the next Federal Reserve meeting.^[4] The UAE Central Bank has historically followed Federal Reserve moves within days.
• September registrations: whether completed homes keep rising while off-plan volumes fall, or whether the ready segment turns too.
• Completions in the second half: how quickly the new supply is absorbed by buyers and tenants.

This report is published monthly in English. The German companion is our Dubai Monitor. Previous edition: Dubai market report, September 2026. Read next: Dubai mortgage for non-residents, off-plan or ready: the numbers and 40 questions answered.

Frequently asked questions

Sources