Is Dubai Real Estate Cooling Down?
The Dubai real estate market has been a rollercoaster of record-breaking highs since the post-pandemic reopening. But as we step into 2026, a new question is emerging for investors: Has the market peaked?
We sat down with Nombasa Mawela, licensee and head of Seeff Property Group’s Dubai office, to cut through the noise and get a realistic forecast for the year ahead. Her take? The market isn't cooling down; it's growing up.
Here’s her expert analysis on what to expect in 2025, the new sweet spots for returns, and why South African investors are doubling down on Dubai.
From Frenzy to Fundamentals: The 2025 Outlook
When asked about the trajectory for 2026, Mawela was clear: the era of hyper-aggressive double-digit price jumps is likely behind us, but that’s a good thing.
"We are transitioning from a period of aggressive price hikes into a phase of sustainable maturity, with capital appreciation projected to stabilize between 5% and 8% this new year. The market remains robust, but we are seeing a healthy shift where value is driven by long-term fundamentals rather than speculation, offering investors more predictability and security."
Analysis: This shift signals a healthier, less volatile market. For the serious investor, "sustainable maturity" means less risk of a bubble and more reliance on tangible drivers like population growth and economic diversification. It’s no longer about getting in on a frenzy; it’s about strategic, long-term wealth building.
The Oversupply Myth
A common concern is the wave of new project handovers. Will an influx of new apartments dilute property values? Mawela dispels this fear by pointing to the bigger picture of Dubai's ambitious growth plans.
"While we expect approximately 40,000 to 50,000 new units to enter the market in 2026, this supply is necessary to meet the population growth target of 5.8 million by 2040. The demand for high-quality, well-located stock—particularly in the luxury and waterfront segments—continues to outstrip supply, meaning prime assets will hold their value well despite the broader inventory increase."
Analysis: Not all supply is created equal. Mawela's insight highlights a crucial segmentation in the market. Mass-market, generic units may face pressure, but prime, luxury, and waterfront properties remain in a league of their own. The key for investors in 2026 will be quality over quantity.
Where the Cash Flow Is: The Short-Term Rental Boom
For investors looking for immediate returns, the traditional long-term lease is no longer the only game in town. Mawela pointed to a specific, high-growth sector.
"Rental yields remain among the highest globally, stabilizing around 6% to 8%, but the real surge in 2026 is in the short-term rental market, which is forecasted to grow by roughly 18% due to tourism demand. Investors should look at flexible, short-term leasing models in key tourist corridors like Downtown and the Marina to maximize their cash flow over traditional long-term leases."
Analysis: Dubai’s tourism numbers are a powerful economic engine. Investors who can pivot to a holiday-home model in hotspot areas stand to gain significantly more than those locked into standard yearly contracts. This requires more active management, but the potential for higher returns is clear.
The South African "Plan B"
As a prominent South African business figure herself, Mawela has a unique pulse on why her compatriots are flocking to Dubai. It goes beyond simple investment; it’s about security.
"South African investors are primarily using Dubai real estate as a hedge against Rand volatility, often purchasing properties in the AED 1 million to AED 3 million range to secure hard currency assets. Additionally, the Golden Visa has become a major drawcard; for an investment of AED 2 million—comparable to the price of a home in a South African upper-middle-class suburb—they gain a 10-year residency, offering a 'Plan B' for security and global mobility."
Analysis: This is a powerful trend born out of necessity. Dubai has become the premier destination for South Africans seeking to dollarize their wealth and secure a future outside of local economic uncertainty. The Golden Visa acts as the ultimate insurance policy, making the investment decision about lifestyle and security as much as financial return.
How Seeff Dubai Is Positioning for 2026
Under Nombasa Mawela’s leadership, Seeff Dubai is adapting to this evolving market landscape. Recognizing that the "easy money" phase is over, the firm is focusing on data-driven strategy and personalized advisory.
For 2026, Seeff Dubai is positioning itself not just as a sales agency, but as a strategic investment partner. They are moving beyond simply listing properties to offering:
- Curated Portfolios: Focusing on high-demand, limited-supply segments like waterfront luxury that are immune to oversupply fears.
- Short-Term Rental Solutions: Helping investors identify properties perfectly suited for the booming holiday-home market and connecting them with management solutions to unlock higher yields.
- Golden Visa Specialist Services: Streamlining the process for international buyers, particularly from South Africa, to ensure their investment meets all residency requirements seamlessly.
In a maturing market, expertise is everything. Nombasa Mawela and her team are ready to guide investors through the nuances of Dubai's 2026 landscape, proving that smart, strategic moves will continue to yield exceptional results in one of the world's most dynamic cities.