IMF Says UAE Property Cooled in First-Half 2026, but Dubai Home Prices Are Holding Firm

The International Monetary Fund has taken the temperature of the Emirates property market again, and its reading for the first half of 2026 is measured rather than alarming. After several years of unusually strong expansion, the Fund says real estate activity across the country eased in the opening six months of the year, with the pace varying by segment and by location. For owners, the reassuring line is that prices have broadly held at or above where they stood in 2025.

The assessment landed at the close of the IMF's annual Article IV visit, the health check it carries out on every member economy. A staff team led by Said Bakhache spent the middle of July in Abu Dhabi and Dubai, meeting officials and working through the data, before issuing its concluding statement. For a market that has set record after record since 2021, cooler transaction volumes alongside steady prices is close to the soft landing policymakers hope for.

A slower market, not a falling one

The distinction matters. Slower activity means fewer deals and a calmer sales floor, not sellers cutting prices. The Fund is clear that the shift has been uneven, with some communities and some property types affected more than others, which is why a single citywide average can mislead. A buyer weighing a purchase this year will learn far more by comparing how prices are holding up across individual Dubai communities than by reading one number for the whole emirate.

Why the banks are not worried

The IMF also examined how exposed the financial system is to any property wobble and judged that lenders' exposure is contained. Banks stay well capitalised, liquidity is ample if a little tighter than before, and a large share of Dubai home purchases are still settled in cash rather than with a mortgage, which limits the knock-on effects a correction could trigger. The Fund still called for continued monitoring, the usual caution for a market that has run hot.

Looking wider, the IMF expects total economic output this year to come in slightly below 2025 before a stronger rebound in 2027, and it noted that private credit growth is likely to slow along with a quieter non-oil economy. None of this changes the long-term case for Dubai property, but it does favour patience and research over a rush to buy at any price. In a market that trades less often yet holds its value, knowing the real recent sale prices on the exact street or tower you are targeting, not the asking prices, is what separates a smart entry from an expensive one.