The report, based on Property Monitor Insights data covering 2020 to August 2026, highlights the rapid expansion of Dubai South’s residential market. Annual residential sales value increased from AED 0.72 billion in 2020 to AED 19.6 billion in 2025, while transaction volumes rose from 672 to 9,788 over the same period. Both indicators increased every year in the report’s full-year series.
Aayush Puri, CEO – Residential, Middle East and CEO – Anarock Channel Partners, said Dubai South had already exceeded its 2025 transaction volume in eight months, with smaller homes increasingly driving activity. Studios and one-bedroom apartments accounted for approximately 76% of transactions during January–August 2026, reflecting growing demand for homes with lower total purchase prices.
Studios and Apartments Drive Residential Demand
Studios accounted for 45% of residential transactions in the first eight months of 2026, more than double their 19.5% share in 2025. One-bedroom homes contributed another 31%. Apartments represented 94.5% of residential sales volume, compared with 31% in 2020.The changing mix of properties has influenced average purchase values. The average residential price rose to AED 1,656 per sq ft in January–August 2026, up from AED 650 per sq ft in 2020. However, the average transaction value declined to AED 1.28 million from its peak of AED 2.57 million in 2023.
According to Anarock, this divergence reflects the increasing share of smaller, lower-ticket homes rather than a broad-based decline in property prices. A lower overall purchase price can coexist with higher prices per square foot when buyers purchase smaller units.
Off-plan properties continued to dominate the market, accounting for 94% of residential transactions in January–August 2026, compared with 73% in 2020. Puri said the market remained in a launch-and-absorption phase, with the ready and secondary segments yet to mature.
Airport Expansion and Infrastructure Support Growth Prospects
Dubai South is a 145 sq km master-planned development centred on Al Maktoum International Airport. The airport's AED 128 billion expansion was approved in April 2024, with ultimate design capacity planned at 260 million passengers and 12 million tonnes of cargo annually. The first operational phase is targeted for 2032.The Dubai South master plan is designed to accommodate approximately one million residents and 500,000 jobs at full build-out. These long-term development plans provide the wider infrastructure context for the area's residential and commercial expansion, although airport capacity targets should not be interpreted as current operating capacity.
Rental Market Expands as Yields Vary by Property Type
The rental market has also grown alongside residential sales. Average annual rent increased from AED 34,534 in 2020 to AED 82,063 in January–August 2026, while rental transaction volume expanded to four times its 2020 level.Anarock's indicative gross rental yields for 2025 stood at 3.9% overall, before service charges, vacancy and transaction costs. Apartments recorded a yield of 4.3%, followed by townhouses at 3.4% and villas at 3.0%.
The report notes that gross yields could come under pressure in 2026 and 2027 if capital values increase faster than rents.
Land Transactions Point to Further Development Activity
Commercial property transaction value increased from AED 0.06 billion in 2020 to AED 5.46 billion in 2025, with land accounting for 97% of the 2025 total. Developers acquired a further AED 2 billion worth of land during January–August 2026, indicating continued activity in the development pipeline.Anarock's outlook suggests that 2026 could set a new annual residential transaction record if the pace recorded in the first eight months continues through December. Based on the January–August sales-value run rate, the report indicates a potential full-year total of approximately AED 23.9 billion. This is a directional calculation rather than a formal forecast.
Upcoming Supply Will Test Market Absorption
The report identifies 38,116 residential units scheduled for delivery between 2027 and 2029, more than 3.5 times the 10,813 units delivered between 2016 and 2026 to date. Scheduled handovers are expected to peak at 16,094 units in 2028.Apartments account for 85% of under-construction stock, compared with 59% of ready stock. The concentration of upcoming apartment supply could intensify competition among developers and make sustained demand essential to market absorption. The secondary market, which represented less than 6% of transaction volume in January–August 2026, may gradually deepen as more off-plan properties are completed and handed over.
Puri cautioned that the concentrated delivery period would test the market's capacity to absorb new supply. The report also emphasises that its outlook is based on recorded transactions and publicly available infrastructure disclosures, rather than a formal forecast. Infrastructure timelines, including the airport expansion, remain subject to changes in phasing and implementation.
