Dubai's Secondary Housing Market Signals Modest Rebound Amid Shifting Seasonal Trends

Dubai’s secondary residential market is showing early signs of recovery, according to new analysis by Espace Real Estate, though transaction volumes remain substantially below the exceptional levels recorded in 2025. The shift represents a change in market direction, not a return to previous peaks.

The most striking indicator is the reversal of seasonal patterns between 2025 and 2026. In the summer months of 2025, Dubai’s secondary market contracted by 14.2% from May-June to July-August, following typical seasonal patterns. In 2026, that trend inverted: transactions increased by 24.6% over the same May-June to July-August transition, an unexpected acceleration during what is historically a quieter period.

Despite that momentum shift, the market remains constrained by year-on-year comparisons. May-June 2026 activity was 61.5% below the equivalent period in 2025, while July-August 2026 was 44.0% below the prior year. The narrowing of that deficit, combined with the reversal of seasonal decline into seasonal growth, signals that underlying market conditions have shifted.

Espace tested this citywide pattern against five established secondary market communities: Arabian Ranches, the Springs, the Meadows, Jumeirah Park and the Lakes. The same directional change appeared across all five. These communities recorded a 6.7% decline from May-June to July-August in 2025, but increased 24.3% over the same transition in 2026. On a year-on-year basis, activity in these five communities was only 26.3% lower than 2025, compared with the 44.0% decline across the wider Dubai secondary market. Espace attributes the stronger relative performance to the prime, end-user-dominated character of these communities, with broader market expansion expected to follow.

John Lyons, Managing Director of Espace Real Estate, cautioned against overinterpreting the figures. “Nobody should confuse early signs of recovery with a return to last year’s market. Activity is still materially lower year on year. But the direction of travel has changed: a market that slowed into July and August last year instead accelerated by around 25% this year, and we see almost exactly the same pattern across a basket of established communities.”

The rental market provides crucial context for assessing how durable this sales recovery might be. Across May to August 2025, Dubai recorded 287,459 rental transactions, covering new contracts and renewals. The equivalent four-month period in 2026 recorded 274,228 transactions, a decline of just 4.6% year on year. That stands in sharp contrast to the 53.4% year-on-year decline in secondary sales transactions over the same period. The disparity suggests the shock to purchasing activity was significantly greater than any change in underlying occupier demand.

In the Springs, new rental contracts in July and August rose from 157 in 2025 to 211 in 2026, an increase of 34.4%. Rental resilience of that scale indicates that housing demand from occupiers remains intact, even as buyer confidence contracted sharply.

Lyons drew a clear line between the two markets. “Sales activity experienced a major confidence shock, but rental activity remained far more resilient. That distinction matters when judging whether the sales recovery has a genuine occupier demand base underpinning it.”

The recovery narrative carries qualifications. Espace has observed price adjustment in live transactions, but the magnitude varies by location, property type and quality. The recovery is also uneven across communities. The Meadows recorded lower July-August activity than May-June, even as four of the five communities in the basket increased. Based on Espace’s live transactions and seller conversations, a community-wide reluctance to reduce price expectations appears to be a contributing factor.

What the data does support clearly is that transaction momentum has changed, and early recovery is visible at both citywide and community levels. Whether that recovery holds will depend on whether occupier demand continues to underpin transaction activity, and whether seller price expectations move closer to what buyers are currently willing to pay.