UAE property boom in 2025: record sales, rental jumps and a looming 2026 supply wave

Office sector snapshot

• Commercial supply was limited in 2025, with less than 280,000 sqft of office space delivered.
• Despite this, demand rose, lifting occupancies and rents for Grade A and well-located assets.
• A sharp change is expected in 2026 when approximately 1.7 million sqft of office space is scheduled for handover, which will relieve some of the current undersupply.

Supply risk and opportunities

• Dubai has over 90,000 units scheduled for completion in 2026, a large pipeline that raises the risk of short-term oversupply in certain segments and submarkets.
• Opportunity exists for buyers to be selective: well-located, competitively priced, or well-managed assets should continue to outperform mass-market or poorly executed projects.

What this means for buyers and investors in Dubai

• Renters may find more negotiation room because of new completions, but prime assets will still command premiums.
• Investors should be cautious with yield projections: rental growth may slow as the handover wave hits, so factor in vacancy and marketing time for newly completed units.

Northern Emirates and Al Ain: the next growth corridors

The Northern Emirates accelerated development momentum in 2025. Colliers highlights that Sharjah and Ras Al Khaimah anchored activity while Ajman gained traction on the back of competitive pricing and better project quality.

Projected deliveries

• Residential supply across the Northern Emirates is expected to become more visible in 2026, with approximately 12,900 residential units forecast for completion.
• Delivery concentration: Sharjah 55%, Ras Al Khaimah 25%, Ajman 20%.

Market characteristics

• The Northern Emirates have attracted value-driven relocations and investor interest due to lower price points and improving infrastructure.
• Sharjah and RAK have seen more branded and lifestyle-led projects, improving the credibility of their master-planned communities.
• Al Ain saw measured recovery across asset classes, with apartment rentals driving growth due to limited near-term supply.

Investor implications

• Yields in some Northern Emirates locations remain attractive compared with central Dubai and Abu Dhabi, but quality varies widely.
• For capital preservation and steady cash flow, pick projects with established track records or reputable developers.

Policy, infrastructure and the factors shaping demand

Several policy moves and infrastructure developments underpinned market confidence in 2025 according to Colliers.

Key items to note

• Formal rental index frameworks rolled out in Abu Dhabi, Dubai and Sharjah, improving transparency in lease renewals.
• Dubai First-Time Home Buyer Program launched in July 2025, aimed at supporting local homeownership and changing demand patterns at the entry-level market.
• Ongoing regulatory reforms and digitalisation of transactions reduced friction and increased investor confidence.
• Etihad Passenger Rail services are scheduled to commence operations in 2026, which will change connectivity across emirates and could shift demand along rail corridors.

Why these matter

• Rental indexes reduce uncertainty for landlords and tenants but also limit unchecked rental inflation.
• Housing schemes directed at nationals will alter the mix of demand in Abu Dhabi and may have knock-on effects on private market pricing.
• Improved transport links typically expand catchment areas and support longer-term price growth in suburbs and satellite cities.

Practical guidance for buyers and investors: how to act on 2025’s signal

We translate the report’s facts into clear actions.

For buy-to-let investors

• Stress-test yield assumptions against slower rental growth in Dubai and potential new completions in 2026.
• Consider Abu Dhabi where mid- to high-end apartment rents rose by 10%–25% in prime pockets; but do the math on purchase price versus expected rent.
• Focus on asset management: upgraded, well-managed units are preferred by tenants, so factor refurbishment costs into acquisition pricing.

For owner-occupiers and first-time buyers

• Explore the Dubai First-Time Home Buyer Program if eligible; such schemes can reduce upfront cost and improve long-term affordability.
• In Abu Dhabi, off-plan appetite is strong — but insist on clear completion guarantees, escrow arrangements and an assessment of developer capacity.

For corporate occupiers and office investors

• Abu Dhabi’s Grade A market tightened in 2025; short-term demand outstripped supply, supporting higher rents. Expect some relief when new stock comes in 2026.
• In Dubai, the large office pipeline for 2026 means occupiers can negotiate for modern, efficient space but should secure flexible lease terms given the delivery surge.

Due diligence checklist

• Verify developer track record and escrow account arrangements for off-plan purchases.
• Confirm rental indexing rules in the specific emirate and how they apply to contracts.
• Model scenarios with conservative rent and occupancy assumptions to avoid overstating returns.

Risks and watchpoints

The 2025 data are impressive, but there are clear risks.

Primary concerns

• Supply timing risk: Dubai’s 90,000+ units scheduled for 2026 and the Northern Emirates’ 12,900 units create a near-term oversupply risk in certain segments.
• Concentration risk: High off-plan activity, especially where many projects are linked to a few large developers, raises execution risk if market or financing conditions change.
• Rent moderation: Smart Rental Index frameworks make aggressive rent hikes harder to sustain; investors must plan for moderated cash flows.

Other potential headwinds

• Global economic slowdown or rising interest rates would pressure demand and borrowing costs.
• Project delivery delays and phased handovers can push revenue timelines out; always build contingency time and cost buffers.

Frequently Asked Questions

Q: Are property prices rising across the UAE in 2025?
A: Colliers reports strong transactional growth and rental increases in many segments. Abu Dhabi recorded more than 21,000 residential transactions and rents rose substantially in prime pockets. Dubai saw record handovers; however price and rent movement varies by emirate, community and asset quality.

Q: Will the large 2026 supply volumes in Dubai depress values?
A: A large delivery pipeline for 2026 (over 90,000 units) raises the risk of localized oversupply, especially for mass-market products. High-quality, well-located projects should hold value better than peripheral, poorly managed schemes.

Q: Is Abu Dhabi a better yield play than Dubai now?
A: Abu Dhabi’s rental growth in 2025 was strong, especially for prime apartments (10%–25%) and prime villas (10%–15%). That said, yield depends on purchase price and ongoing costs; each opportunity needs a case-by-case assessment.

Q: How will the Smart Rental Indexes affect landlords?
A: Rental indexes increase transparency and make aggressive rent hikes harder to justify. Landlords should focus on asset quality and tenant retention through management and upgrades to sustain yields.

Bottom line: read the data, then be selective

Colliers’ report shows 2025 was marked by unusually strong transactional activity, clearer rental frameworks and major delivery waves. For investors and buyers that means opportunity and risk at the same time. The safe play is disciplined underwriting: verify developer credentials, model conservative rental scenarios, and prioritise assets that meet tenant demand for quality and management. If you are buying in Abu Dhabi, factor in recent rent growth; if you are buying in Dubai, factor in the 2026 handover wave. For those looking at the Northern Emirates, lower entry prices are attractive but quality control is essential.

A concrete takeaway: when projecting returns, use rent growth assumptions no higher than the lower bound of the ranges Colliers reports, and assume a modest marketing vacancy for the first 6–12 months after handover. That simple change will prevent many common valuation errors.