Weekly Insights for Dubai Property Investors: January 10, 2026
- Stephen James Mitchell MBA
- Jan 11
- 6 min read
Updated: Jan 12
What we've sensed for months is now playing out in the data — the UAE isn’t simply withstanding global volatility; it’s actively profiting from it.
The UAE’s 2026 GDP forecast was revised upward by multiple institutions. Standard Chartered now expects 5% growth — up from 4% — with the Central Bank of the UAE projecting 5.3% and the IMF, World Bank, and ICAEW all aligning near the 5% mark.
The reason? Sustained non-oil expansion, record foreign trade, a surge in new company formation, and high tourism performance — all of which feed directly into real estate.
If you’re ready to turn this momentum into returns — whether in prime commercial assets, villa communities, or off-plan launches — reach out now. I’ll share a tailored shortlist of high-yield, data-backed investment options based on your goals. Click here to speak with me directly.
Macro Strength: Upgraded Growth, Deep Liquidity, Twin Surpluses
GDP now forecast to reach 5.0–5.6% in 2026 across all major institutional outlooks.
Nominal GDP in 2025 reached $569 billion, supported by strong domestic demand and global trade connectivity.
Foreign trade is expected to approach $1 trillion in 2026, with one-third of that flowing through the UAE–Asia corridor.
Twin surpluses (fiscal and current account) remain intact, driven by robust banking sector liquidity. The UAE still has the lowest loan-to-deposit ratio in the GCC, providing banks significant lending headroom.
Inflation is forecast to remain contained at 1.8% in 2026, aided by stable housing costs, effective price controls, and diversified supply chains.
In short: solid fundamentals, plenty of runway.
Commercial Property: Entering a New Cycle
Dubai’s commercial real estate market is undergoing a structural shift. Transaction volume rose 35.1% year-on-year, and sales value soared 77.9% to $4.22 billion in the first 11 months of 2025. But there’s more beneath the surface.
fäm Properties points to the emergence of a two-tier office market by 2028, with tenants increasingly favouring modern, efficient, Grade A spaces. The long-standing gap between office and residential design standards is finally closing. This reset will widen the spread between outdated stock and institutional-grade assets — and is something every investor should watch closely.
Explore commercial listings and insights at Mitchell’s Commercial Realty — featuring premium office and retail properties across Dubai, along with market intelligence to help you identify emerging trends.
Business Formation: 250,000 New Companies in 2025 Alone
The UAE registered 250,000 new businesses last year, pushing the total above 1.4 million companies — a 118.7% increase since mid-2021. Since the introduction of 100% foreign ownership in September 2021, over 760,000 new firms have entered the market.
And it’s not just quantity. Legislative reform is setting the tone:
New amendments to the Commercial Companies Law now allow multiple share classes for LLCs — a regional first.
Companies can move between free zones and mainland without liquidation or losing corporate history.
Free zone firms can open mainland branches, expanding reach while maintaining structure.
Introduction of non-profit commercial companies and launch of the Corporate Citizenship Law 2026, giving qualified firms “citizen-like” benefits — including priority procurement access and unified sponsor codes.
Regulatory agility is keeping pace with economic momentum — and that’s rare.
Tourism Surge: Now 15% of GDP and Growing
The UAE's tourism sector hit AED 291 billion ($79.24B) in 2025, making up 15% of national GDP, up from just 6% in 2021. Hotel occupancy averaged 79%, among the highest globally, with revenues at AED 89 billion through October.
Dubai broke ground on the AED 128B expansion of Al Maktoum International Airport, aiming to handle 260 million passengers annually — a future-proof move if ever there was one.
UAE hotel occupancy reached 79% in the first 10 months of 2025 — up from 78% in the prior year — ranking among the highest both regionally and globally, with total hotel revenues of AED 89 billion ($24.2 billion).
Tourism investment rose to AED 32 billion in 2024, and is expected to reach AED 35 billion in 2025.
Short-term rentals, branded residences, and hospitality-tied developments stand to benefit immensely here.
Dubai Non-Oil Economy: Robust, But With Pressure Points
The S&P Global UAE PMI for December came in at 54.2, above the 50 mark that signals expansion, though slightly down from November’s 54.8. Business activity remained solid, especially in tourism-driven sectors, tech, logistics, and international trade.
However, margin pressures are building:
Input costs rose at the fastest pace in 15 months (salaries, transport, maintenance).
Hiring slowed, and backlogs increased, suggesting a possible lag in capacity expansion.
Inventories fell sharply, as firms trimmed excess stock to preserve margins.
In Dubai specifically, the PMI was 54.3 in December, with output growth the sharpest since March 2024, despite inventory and input cost strain. Still, business confidence dipped, with companies citing market saturation and competition as growth constraints heading into 2026.
Abu Dhabi Property: Rents Spike as Supply Stays Tight
According to Bayut’s 2025 market report:
Apartment rents rose 8–30%, with the strongest gains in Al Nahyan and Al Reem Island.
Luxury apartment rents increased up to 32%, led by demand on Saadiyat and Yas Islands.
Villas rose up to 16%, especially in mid-tier communities like Al Raha Gardens and Shakhbout City.
Only 6,500 new residential units are expected in 2026, which may keep upward pressure on prices.
The rental market is tightening. Whether for capital appreciation or yield, high-quality residential assets in Abu Dhabi are gaining attention again.
Regional Resilience: UAE-Saudi Trade Holds Strong Despite Tensions
Despite geopolitical friction — particularly in Yemen — Saudi-UAE trade ties remain robust, with bilateral trade reaching $30 billion in 2023, up 42% since 2020.
UAE is Saudi’s 3rd-largest import source and 5th-largest export destination.
Emirati investments in Saudi exceed $9.2 billion, and Saudi investment in the UAE tops $4.3 billion.
Shared supply chains in logistics, retail (Lulu, Almarai, etc.), and re-export trade remain tightly integrated.
The takeaway: While competition between Riyadh and Dubai exists, both nations are prioritizing economic cooperation over confrontation — and that’s critical for long-term investor stability.
Global Backdrop: US & China Outlook Improves, Europe Lags
US 2026 growth upgraded to 2.3% by Standard Chartered, citing AI adoption, tax incentives, and capex.
China now forecast at 4.6% in 2026, with a boost from export diversification and the US-China trade truce.
Eurozone growth stays modest at 1.1%, weighed down by uneven performance and trade pressures.
Emerging market investors are watching for capital rotation back into productive assets — and the UAE is well positioned to benefit as a diversified, low-tax, high-infrastructure hub.
Investor Perspective: What to Watch
Grade A Office Pipeline Will Reprice the Market
New Grade A/A++ office launches from 2028 (DIFC fringe, Business Bay, SZR, Dubai South)
Expect 20–30% premium rents vs older stock
ESG features, branded lobbies, and concierge services to become standard
Strategic Insight: Early entry = upside in capital value + 8–10% yields long term
Branded Villas & Tourism-Linked Residences Set to Outperform
High demand in Palm Jebel Ali, Dubai Islands, Al Marjan Island
Branded residences (e.g., Bugatti, Ritz-Carlton) outperform in $/sqft and rental ROI
Short-term rental demand supported by 20M+ annual tourists
Strategic Insight: Focus on branded, low-supply beachfront or resort-style stock
UAE Regulations Now Support Global Investors
100% foreign ownership in most sectors
9% corporate tax, real estate largely exempt via SPVs
Golden Visa + Family Office Law support long-term planning
Strategic Insight: UAE is now a top-tier jurisdiction for holding, restructuring, and legacy planning
Non-Oil Economy at 77.5% — Strong Macro Fundamentals
Driven by tourism, real estate, finance, and logistics
Stable FX, sovereign reinvestment, and policy execution build resilience
Regulatory visibility = growing appeal to HNWIs and institutional capital
Strategic Insight: UAE is a safe-haven growth market with real economy momentum
Long-Term View: Follow the Fundamentals
If you're thinking long-term, focus on infrastructure, regulation, and liquidity. Dubai isn’t just adding towers — it’s laying a deeper economic foundation.
The true signals aren’t just in sales volumes or flashy launches, but in the volume of business formation, the pace of regulatory evolution, and the alignment of private and public capital. That’s where tomorrow’s opportunities are being built.
Let’s Talk
If you’d like to unpack where the most resilient opportunities are emerging — in stabilised residential areas or income-generating commercial zones — I’m happy to share a focused, data-driven shortlist based on your investment goals.
📞 No pressure, no sales pitch—just a focused, informed conversation about your investment goals. Let’s talk.
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