Market Potential and Outlook
The current investment environment in the UAE reflects cautious optimism. On the one hand, construction activity is accelerating. On the other, demand in the secondary market in Dubai remains uncertain due to the very high pace of new development.
Dubai
The new development program for Dubai is built around five key pillars:

• Increasing the population from 3.6 million to 6 million
• Expanding airport capacity to 260 million passengers per year, which is twice that of the world’s leading transport hubs
• Quadrupling green areas and transforming multiple districts into green urban zones
• Large-scale expansion of the transport network, which will stimulate demand in currently underdeveloped locations
• Creation of a multi-kilometer, climate-controlled pedestrian and cycling route to enhance urban livability

Implications for Investors:

1. Dubai has repeatedly set ambitious goals and successfully achieved them. The city takes development planning seriously, and the outlined priorities clearly reflect resident needs. Over the past 50 years, most strategic objectives have been delivered without major systemic errors.
2. Changes to the transport network will have a significant impact on pricing across multiple locations, particularly with the development of the Blue Line.
3. Some older districts will lose relevance due to new developments, while others will appreciate significantly. The direction of capital migration from legacy locations to emerging areas is already becoming clear.
4. The diversity of projects is high, making it essential to focus on assets with predictable returns. While such opportunities exist, the number of projects unsuitable for investment purposes is considerably higher—and they are often more aggressively marketed. Many developments are already overpriced at launch, offering little to no pre-construction upside.
5. Several locations currently present strong long-term entry opportunities (5–7 years) with the potential for multiple price appreciation. However, unit selection is critical—even a 100-meter difference in location can significantly affect value growth potential.
6. Many of the most valuable projects remain under the radar due to limited marketing exposure, yet these are likely to be the most востребованы на вторичном рынке через 5–6 лет.
7. Redevelopment and flipping strategies are gaining renewed potential due to increasing pressure on older districts.
8. The commercial real estate market in 2025 recorded historically low vacancy rates, creating potential for rental yield growth. If the trend continues, yields could reach 9–11% annually in USD, significantly exceeding residential returns. While new commercial supply is being developed, the potential for temporary shortages is already evident.
9. In 2026, migration flows from Europe—primarily from the United Kingdom and Germany—are expected to increase.

Given the wide range of offerings and aggressive marketing activity, it is critical to exercise caution when selecting projects. In such an environment, acquiring low-liquidity assets becomes a significant risk.
It is also important to remember that the Dubai market has historically demonstrated volatility. Following rapid growth in 2005–2008, a sharp correction occurred in 2009. This was followed by recovery in 2010–2014 and another correction in 2014–2020. The current growth cycle began in 2021 and continues to this day.
Many analytical agencies forecast a correction due to the large volume of new supply expected in 2026. In reality, market dynamics will depend directly on the execution of the growth strategy. Dubai has a strong chance of avoiding a correction, as conventional forecasts are based on historical data but often fail to account for population growth driven by continued migration inflows.

Therefore, regardless of the development scenario, the following recommendations should be considered:

• Focus on high-value locations that are less likely to be affected by corrections, even in the event of a downturn in the mass market. Coastal areas represent zones of particular value, although they are not homogeneous.
• With each passing year, the quality of community infrastructure within projects will have an increasing impact, particularly in the premium segment.
• There are locations where entry should be considered only after 2026 data becomes available, providing clarity on market direction. Many areas—primarily in the mass segment—should already be avoided if the objective is investment income.
• For residential rental income, properties delivered 5–7 years ago, fully furnished and equipped, remain more optimal than new developments.
• Commercial real estate continues to be relevant as a more predictable strategy when supported by the right lease structure and location.
• Abu DhabiModerate growth in transaction volumes
• Stable end-user segment
• Investment focus on residential and mixed-use assets

2026 Outlook:
✔ Transaction growth (~3–6%)
✔ Demand concentrated in suburban areas and around new infrastructure hubs
✔ Rental yields remain stable without sharp fluctuations
✔ Premium projects continue to attract HNWI from Asia and the GCC
Key Drivers:

• Structural corporate relocation
• Government and infrastructure projects
• Inflow of professionals in oil & gas, finance, and technology

➡ Conclusion: More conservative dynamics than Dubai, with lower volatility.

• SharjahSteady increase in market share
• Expansion of the mid-market segment
• More affordable housing compared to Dubai
• Growing domestic and regional demand

2026 Outlook:
✔ Transaction growth (~5–8%)
✔ Mid-priced segments will remain in demand
✔ Higher price growth potential per square meter than in Fujairah and Ras Al Khaimah
✔ Rental demand supported by population growth and migration from other emirates
Key Drivers:

• Proximity to Dubai and lower entry prices
• Infrastructure improvements
• Growing middle-class demand

➡ Conclusion: Sharjah is strengthening its position as an alternative to Dubai for investors and families, though it remains significantly smaller in scale.

• Ras Al KhaimahFaster growth in transaction share compared to other smaller emirates
• Niche market expansion
• Focus on resort and branded residence projects

2026 Outlook:
✔ Highest percentage growth in transactions among smaller emirates (~8–12%)
✔ Rental yields may exceed previous years
✔ Strong appeal for leisure and dual-use properties
Key Drivers:

• Development of tourism infrastructure
• Branded residences and resort developments
• Relatively low entry thresholds

➡ Conclusion: Growth is tourism-driven and supported by unique formats, but with higher correction risk depending on demand.

• FujairahSmallest share of construction volume
• Stable but narrow market
• Slower transaction dynamics

2026 Outlook:
✔ Moderate growth (~3–5%)
✔ Demand primarily local and suburban
✔ Rental yields stable without sharp increases
Key Drivers:

• Infrastructure and logistics projects
• Limited housing supply
• Growing but relatively small tenant base

➡ Conclusion: A “steady” market suitable for long-term holding rather than active speculative strategies.