Land prices in Dubai may need to fall or off-plan prices may need to rise as 2026 becomes a key year for the city’s real estate market, according to property executive Firas Al Msaddi.
Al Msaddi, chief executive of fäm Properties, said 2026 is expected to see fewer new project launches and a rise in completed homes entering the market, increasing pressure on developer profitability and cash flow.
“Land prices in Dubai are at historic highs, and developer profitability depends far more on how quickly units sell than on headline margins. Sales velocity is becoming the key constraint,” Al Msaddi said.
Fewer launches expected as handovers rise
He said buyer protection mechanisms remain in place but do not shield developers from financial pressure.
“Escrow accounts protect buyers, but they do not guarantee developer returns,” he said. “When sales slow, cash flows tighten, returns get squeezed, and developers naturally become more selective about launching new projects.”
Al Msaddi said the market faces two outcomes in 2026: land prices adjust to current off-plan prices, or off-plan prices increase to justify existing land costs.
“There are two sustainable outcomes,” he said. “If land prices adjust, launch feasibility improves, end prices stabilise and transaction volumes return gradually.
“If land prices remain elevated, off-plan prices must rise, product quality and differentiation become critical, and only the strongest locations and developers will succeed.”
He said it is unlikely that land prices will remain high while sales prices stay flat and volumes remain strong.
Developers face cash flow and feasibility constraints
Dubai has historically absorbed around 35,000 completed homes each year in balanced conditions. In 2026, Al Msaddi expects between 40,000 and 50,000 homes to be handed over as projects under construction reach completion.
“This doesn’t point to a price correction,” he said. “What it means is slower selling times, flatter prices, and tighter margins. The impact is felt by developers first, not end users.”
He said new project launches in 2026 are expected to fall compared with 2025, not due to reduced demand but because of financial feasibility.
Record construction pipeline shapes market outlook
Launches are currently 47 per cent lower than the same period last year. Al Msaddi said this points to a decline in new supply while demand remains in place.
Dubai currently has close to one million freehold completed homes, most of which are occupied and traded in what he described as a stable market. He said there is no sign of ongoing vacancy pressure or forced selling.
He said the main pressure point lies in the volume of homes under construction, estimated at around 500,000 units, the largest pipeline the city has carried at one time.
“Most of this supply is already sold,” he said. “The key issue is how and when investors sell and move their money out.”
