Dubai's economy generated approximately AED473 billion ($128.8 billion) of real output in the first half of 2026, according to Dubai Data and Statistics Establishment figures at Digital Dubai, as reported by Arabian Business. H1 2025 output was approximately AED484 billion, so real output was 2.3% lower. At current prices, output rose 0.2% to approximately AED505 billion. Current-price figures include price changes. The mix also shifted. Financial and insurance activities grew 8.8% in real terms, and health and social work grew 14.3%.
The IMF has set out the forward view. Its October 2026 World Economic Outlook projects UAE real GDP growth of −3.9% in 2026 and 7.7% in 2027. Near-term energy prices are moving the other way. Brent settled at $116.72 a barrel on Friday, a six-month high, after another wave of Houthi attacks on Saudi Arabia. The National reported that inflation fears had fuelled expectations of a further Federal Reserve rate rise next week.
Two readings pull against each other this week. The official data and the IMF outlook describe an economy shifting towards finance and healthcare, with the recovery placed mainly in 2027. The cost of energy and of dollar-linked debt is a question for 2026. Inside the property market, the clearest signal came from tenants. An analysis of DLD rental registrations found residential lease renewals 26.5% lower year on year in September. Savills, meanwhile, recorded office rents stable at approximately AED241 per sq ft in the third quarter.
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Section 01
Dubai's H1 Real Output Was AED473 Billion, With Finance Up 8.8% and Real Estate at 11.8% of the Economy
Dubai GDP, H1 2026 (Dubai Data and Statistics Establishment at Digital Dubai, via Arabian Business, October 2026)
| Figure | |
|---|---|
| Real GDP | ~AED473bn ($128.8bn), −2.3% (H1 2025: ~AED484bn) |
| GDP at current prices | ~AED505bn ($137.5bn), +0.2% |
| Financial and insurance, real | ~AED65.9bn, +8.8% (14% of real GDP, from 12.5%) |
| Health and social work, real | ~AED6.2bn, +14.3% |
| Real estate, current prices | AED65.1bn, +5.4% |
| Real estate, constant prices | AED55.8bn, −2.5% (11.8% of real GDP) |
| Construction, constant prices | AED33.2bn, +2.4% |
| Wholesale and retail trade, constant prices | AED96.9bn, −6% (20.5% of real GDP) |
| Transportation and storage | AED50.6bn, −7.4% |
First, a note on terms. Real, or constant-price, figures remove the effect of price changes, so they measure the volume of activity. Current-price figures measure money value. When the two diverge, prices account for the gap.
That distinction matters most in real estate. Real estate activities grew 5.4% at current prices to AED65.1 billion, against AED61.8 billion a year earlier. At constant prices, however, the sector declined 2.5%, to real value added of AED55.8 billion. Put simply, the sector earned more in dirhams, but the underlying volume of activity was lower. Construction grew on both measures: 2.4% in real terms to AED33.2 billion, and 8.6% at current prices to AED35.3 billion.
Most of the growth came from finance and services. Financial and insurance activities grew 8.8% in real terms to approximately AED65.9 billion. That raised their share of real GDP from 12.5% to 14%. Health and social work grew 14.3%, electricity, gas, water and waste 5.4%, and information and communication 2.7%. Wholesale and retail trade, at 20.5% of real GDP, declined 6% at constant prices. Transportation and storage recorded a 7.4% decline, and manufacturing slipped 0.9% in real terms.
For commercial investors, the composition tells you more than the headline. Financial firms are office occupiers. A sector that now produces 14% of Dubai's real output, and grew 8.8% in real terms, is a source of office demand that does not depend on trade or transport volumes.
IMF World Economic Outlook projections (IMF, October 2026)
| Figure | |
|---|---|
| UAE real GDP growth, 2026 | −3.9% |
| UAE real GDP growth, 2027 | 7.7% |
| UAE inflation (average consumer prices), 2026 | 4.5% |
| UAE inflation (average consumer prices), 2027 | 2.5% |
| Saudi Arabia real GDP growth, 2026 / 2027 | −3.3% / 7.9% |
| World real GDP growth, 2026 / 2027 | 3.1% / 3.4% |
The IMF's October World Economic Outlook projects UAE real GDP growth of 7.7% in 2027, following −3.9% in 2026. Saudi Arabia follows a similar profile, at −3.3% and 7.9%. World growth is projected at 3.1% and 3.4%. The IMF puts UAE consumer price inflation at 4.5% in 2026 and 2.5% in 2027.
Arabian Business reported the 2027 figure from a DIFC event. There, Dr Jihad Azour, Director of the IMF's Middle East and Central Asia Department, presented the October 2026 Regional Economic Outlook. According to that report, the 2027 projection is 2.4 percentage points above the IMF's April forecast. The same report says continued AI investment could add approximately 0.5 percentage points to annual UAE growth. It also says average GCC inflation is expected to fall to 2.4% in 2027 and to approximately 2% from 2028. That 2.4% is a GCC average, while the 2.5% in the table is for the UAE alone. The two measure different things.
Dubai's H1 data and the IMF's UAE projections cover different ground. The first is one emirate over six months, compared with the same half of 2025. The second is the whole federation over calendar years. I present them side by side, each on its own terms.
The practical point is timing. The IMF's two figures describe one path: a weaker 2026 and a stronger 2027. Any return projection should say which year it depends on. A plan whose income or exit falls in 2026 carries a different risk from one that runs into 2027, the year for which the IMF projects 7.7% growth.
Brent rose 3.14% on Friday to settle at $116.72 a barrel, after briefly topping $117. The trigger was another wave of attacks on Saudi Arabia by Yemen's Houthi rebels. Over the week, Brent gained 6.24%. West Texas Intermediate closed at $103.27, up 3.82% on the day and 1.83% on the week. Gold fell 1.21% to $3,995.88 an ounce.
Accounts of Hormuz differ, so I give each as reported. MUFG research cited by The National says production and export flows through the Strait are still holding at close to pre-conflict levels, though at higher shipping rates. Elsewhere, the same article refers to the effective closure of the Strait. A separate National report says US Energy Secretary Chris Wright stated last week that up to 14 million barrels a day were passing through the Strait. He also said Gulf crude flows had recovered to between 80% and 90% of prewar levels.
On rates, the Federal Reserve's most recent decision, on 16 September, raised the federal funds target range by a quarter point to 3.75–4%. The vote was 12–0, and the statement said inflation “remains elevated”. This week, The National reported that inflation fears driven by high energy prices had fuelled a belief that the Fed will raise rates again next week. The Fed has announced no such move.
The dirham is pegged to the US dollar, so the Fed's path feeds into the cost of financing Dubai property. If you carry variable-rate debt, model at least one more quarter-point rise above the current 3.75–4% range before you refinance or take on a new purchase.
Section 04
UAE Petrol Prices Are More Than 70% Above March, and Analysts Expect a Further Rise in November
UAE pump prices rose for a third consecutive month in October. Super 98 now costs Dh4.40 a litre, Special 95 Dh4.28, E-Plus 91 Dh4.21 and diesel Dh4.80. The National reports that prices are up by more than 70% since March, which it describes as the first full month of the war in Iran. Analysts expect another rise in November. No November price has been announced.
Fuel is one of the most visible household costs, and it forms part of the IMF's projection of 4.5% UAE inflation in 2026. For residential landlords, it affects how much tenants can absorb at renewal, which the lease data below makes concrete.
With fuel more than 70% above March levels, a renewal increase that a tenant would have accepted a year ago is now more likely to send them looking elsewhere. Set renewal rents with that alternative in mind.
Explore office and retail opportunities at Mitchell's Commercial Real Estate.
Dubai office market, Q3 2026 (Savills Middle East, Dubai Office Market in Minutes, via Economy Middle East, 23 October 2026)
| Figure | |
|---|---|
| Rental transactions | ~20,200, −8% quarter on quarter |
| New leases / renewals | 51% / 49% |
| Spaces below 1,000 sq ft | 66% of transactions |
| Spaces below 500 sq ft | 40% of transactions |
| Average rent | ~AED241 per sq ft, stable |
| Pipeline, 2026–2030 | ~20.4m sq ft GLA |
| Freehold share of new supply | 86% (2028), 78% (2029) |
Savills recorded approximately 20,200 office rental transactions in Q3 2026, 8% fewer than in the previous quarter. Average rents held at approximately AED241 per sq ft. New leases made up 51% of transactions and renewals 49%. Savills also recorded corporate requirements of more than 30,000 sq ft during the quarter.
Most leasing is in small units. Spaces below 1,000 sq ft accounted for 66% of rental transactions, and offices below 500 sq ft for 40%. For anyone holding a small office unit, that is the tenant pool you are letting to.
The longer-term issue is supply. Savills expects approximately 20.4 million sq ft of gross leasable area to be delivered between 2026 and 2030, with a larger increase from 2028 onwards. Freehold buildings, where individual units are sold to separate owners, are expected to make up 86% of new supply in 2028 and 78% in 2029. By 2030, the pipeline is expected to shift towards single-owned developments.
Stable rents and a small majority of new leases show a market that is still taking in occupiers. However, most of the supply arriving in 2028 and 2029 will be freehold units competing for the same small-office tenants. If you are buying a small office now, plan your exit or re-letting with that competition in mind. Treat today's AED241 per sq ft as a current rent rather than a floor.
An analysis of Dubai Land Department (Ejari) rental registrations, issued as a press release on Zawya, finds that residential lease renewals have fallen by more than 18% year on year in every month since May 2026. Renewals fell 23.0% in June, 25.3% in July, 25.1% in August and 26.5% in September. New residential leases moved within a much narrower range, from a 6.3% fall in August to a 4.3% rise in September.
Renewals now account for 51% of residential leasing activity, down from 59% a year earlier, and from 56% in June. In September alone, renewals fell by 8,457 contracts compared with the same month last year, while new leases rose by 936. The analysis covers apartments and villas, and later registrations may revise the most recent months.
The price evidence comes from Dubai Marina. There, the premium a new one-bedroom lease commanded over a renewal narrowed from around AED17,000 in January to around AED2,000 by August. With the gap that small, the extra cost of moving rather than renewing has largely gone.
As I noted in the September 26 edition, a separate brokerage analysis of DLD data found tenants choosing to move rather than renew over the summer, as new-lease rents fell faster than renewal rents. This week's release points the same way. Because the two analyses measure different things, I read them as corroborating each other rather than as one series. Like the earlier one, this is a private firm's analysis of government data rather than a DLD publication, and I weight it accordingly.
Offices show a similar pattern, with new leases at 51% of Savills' Q3 transactions. For residential landlords, a sitting tenant can no longer be assumed to renew. If your yield assumes a renewal, run a second case that includes a vacancy period and a new-lease rent. Renewals are 26.5% below where they were a year ago.
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Land Department data reported by Arabian Business show Dubai recorded AED13.47 billion ($3.67 billion) of real estate transactions between 12 and 16 October. Sales accounted for AED8.59 billion ($2.3 billion) across 2,676 transactions, and mortgages for AED3.72 billion ($1 billion). On my arithmetic, the average sale was roughly AED3.21 million, and mortgages made up about 28% of total value. The average depends on the mix of properties sold, so it is not a price measure.
For this edition's week, 18 to 24 October, DLD's register shows where the largest single amounts went. The three largest sales of any type were plots of land in Al Rowaiyah First, all registered on 22 October, at AED214,538,410, AED134,380,570 and AED126,283,693. The largest apartment sale was AED55,000,000 at Balqis Residence on 23 October. The three largest office sales were all at Bureau Lamar, each registered at AED43,759,800 on 23 October. The largest villa sale was AED18,200,000 in Eden Hills, also on 23 October. The largest shop sale was AED11,045,843 at One by Binghatti on 20 October.
Land at the top of the register is worth watching, because plot purchases are the earliest stage of future supply. Individual deals at the top say little about the wider market, however. On the 12–16 October data, the average sale was roughly AED3.21 million.
MEED's latest report, as reported by Economy Middle East, counts more than 174 active data centre projects in the GCC, representing over $93 billion of investment. More than a dozen facilities valued at over $100 million each are under tender, and more packages are expected over the next 6–12 months. Saudi Arabia and the UAE are leading the expansion. The report notes growing emphasis on access to power and grid capacity, cooling efficiency, land availability and sustainability requirements.
These figures cover the whole GCC. For investors looking beyond homes and offices, data centres depend more on land and power than on securing tenants one by one. With more than $93 billion of projects active across the region, serviced land with grid capacity is the input most likely to gain from this demand.
The Dubai Land Department will hold the fourth Real Estate Day for Emirati Employment on Thursday, 29 October at Address Sky View Hotel. Its partners are the Ministry of Human Resources and Emiratisation, the Emirati Talent Competitiveness Council (Nafis) and the Emirati Human Resources Development Council in Dubai, and companies from across the real estate sector will take part. DLD's Real Estate Empowerment Programme helped create more than 2,100 jobs for UAE nationals between 2023 and 2026. The initiative supports the Dubai Economic Agenda D33 and the Dubai Real Estate Sector Strategy 2033.
If you run a property business in Dubai, Emiratisation is part of how the regulator is building the sector, and your hiring plans should reflect that. The programme's 2,100+ placements to date show the scale it has already reached.
In closing
Final View for Dubai Property Investors
This week's official data are mainly about a change in composition. Finance grew 8.8% in real terms and now produces 14% of Dubai's output. Real estate value added rose in money terms but fell in volume. The IMF projects −3.9% for the UAE in 2026 and 7.7% in 2027. I keep all of these in view. None of them tells you directly what your unit will rent for next year. The lease data comes closest to that.
Four things I would do differently after this week. First, stop treating a renewal as the base case. With renewals 26.5% lower year on year in September, underwrite every residential holding on a new-lease rent and a vacancy period, and treat a renewal as upside.
Second, stress-test your debt. The Fed's last move took its range to 3.75–4%, and markets are discussing another rise. Brent at $116.72 keeps inflation pressure on that decision. Variable-rate borrowers should model a further increase now rather than after it happens.
Third, in offices, buy for today's demand and time your exit around the pipeline. Rents are stable at about AED241 per sq ft, and small units make up most of the market. From 2028, most new supply will be freehold units competing for those same tenants. Finally, treat 2027 as the year the IMF's recovery projection rests on, and make sure your return assumptions state which year they depend on.
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Published 24 October 2026 by Stephen James Mitchell MBA. Market figures quoted reflect the data available at that date.
