Dubai recorded remarkable real estate activity in April 2026, with property transactions valued at approximately AED 68.56 billion, according to data from the Dubai Land Department. This represents an increase of more than 20% compared with March, which experienced a slowdown amid the Iran war.

This increase comes at a time when Dubai’s real estate sector is driven by rising investment demand, particularly from foreign investors, who at certain times account for between 40% and 50% of total activity.

This relative reliance on external demand makes the market more sensitive to fluctuations than markets that depend more on local demand, as any change in global capital flows or international interest rates can quickly be reflected in demand and price levels in the local market.

Estimates indicate that part of the trades involve quick resales rather than long-term residential demand, with secondary market activity potentially growing at rates of up to 15% higher than the primary market at certain times.

According to reports from Knight Frank, the Dubai real estate market before 2024 experienced annual upward waves ranging from 10% to 20% in some cycles, driven by global capital inflows and investors moving toward relatively more stable markets.

These data suggest that the current growth rate of around 20% is not isolated from a historical context of consecutive increases, but at the same time, it places the market within a high-growth range that requires careful monitoring to prevent it from developing into an unsustainable inflationary cycle.

Comparisons presented by Knight Frank indicate that markets recording increases exceeding 15% to 20% over short periods are later more prone to price corrections, particularly if this growth is not supported by strong population growth or stable domestic demand.

These comparisons suggest that rapid growth, despite being an indicator of short-term market strength, may become a pressure factor if it is not balanced by fundamental economic factors.

On the other hand, the luxury real estate sector in Dubai continues to perform more strongly than the market average, with its sales rising at times by up to 25% compared to mid-range projects, widening the price gap within the market between different segments and increasing the disparity in growth dynamics.

As for risks, the significant reliance on external demand, which can reach about 50% of the market at certain periods, makes the sector more susceptible to global interest rate effects and geopolitical changes, potentially leading to sharp fluctuations if international economic conditions change. Any global monetary tightening or slowdown in investment flows may quickly impact liquidity levels in the local market.

In light of these indicators, Knight Frank emphasizes that the sustainability of real estate growth depends on maintaining a balance between real and investment demand.

Continued growth ranging from 10% to 20% without sustainable demographic and economic support may increase the likelihood of subsequent correction cycles, making the current phase a strong expansion phase that requires maintaining growth balance to avoid future imbalances or sharp price fluctuations.