Dubai South residential transactions in 2026 surpass full-year 2025 figures in just 8 months

Dubai South recorded 12,428 residential transactions between January and August 2026, 27 per cent higher than the 9,788 homes sold during the whole of 2025, according to Anarock Research’s Dubai South Residential Micro-Market Report.

Residential sales value touched AED 15.9 billion during the eight-month period, which is 81 per cent of the AED 19.6 billion reported in 2025.

The report, which tracks transactions from 2020 to August 2026, shows sustained growth in the market, with annual residential sales value rising from AED 0.72 billion in 2020 to AED 19.6 billion in 2025, around 27 times the starting level. Transaction volumes also increased steadily, from 672 homes in 2020 to 9,788 last year.

According to Aayush Puri, CEO - Residential, Middle East & CEO - Anarock Channel Partners, Dubai South has already surpassed its full-year 2025 residential sales volume in just eight months. "The important change is what buyers are purchasing: studios and one-bedroom homes now account for around three-quarters of transactions. Smaller-ticket apartments are becoming the main driver of activity, broadening the corridor’s residential appeal beyond the larger homes that led its earlier growth," he said.

Demand driven by studios and apartments

Studios amounted to 45 per cent of residential transactions between January and August 2026, more than twice their 19.5 per cent share the previous year. One-bedroom homes comprised another 31 per cent, which makes the combined share of these smaller units to nearly 76 per cent. Apartments accounted for 94.5 per cent of residential sales volume, up from 31 per cent in 2020.

The shift towards smaller homes has also changed the relationship between prices and purchase budgets. The average residential price reached AED 1,656 per sq ft in January-August 2026, compared to AED 650 in 2020. However, the average ticket size eased to AED 1.28 million from its peak of AED 2.57 million in 2023.

"A lower average ticket size should not be mistaken for a market-wide price correction," pointed out Puri. "The report shows a greater share of smaller homes being sold even as average prices per square foot have risen. A lower total purchase price does not necessarily mean a lower price per square foot. The changing product mix is central to understanding those two trends."

Off-plan properties continued to dominate, accounting for 94 per cent of residential transaction volume in January-August 2026, compared to 73 per cent in 2020.

“This is a market still in its launch-and-absorb phase, with the ready and secondary segment yet to mature,” he added.

Rental market too sees upward momentum

Dubai South’s rental market has also grown alongside residential sales. Average annual rent rose from AED 34,534 in 2020 to AED 82,063 in January-August 2026, a 2.4-fold rise, while rental transaction volume spiked to four times its 2020 level.

Apartments recorded an indicative gross rental yield of 4.3 per cent in 2025, before service charges, vacancy and transaction costs. Overall gross yields stood at 3.9 per cent, followed by townhouses at 3.4 per cent and villas at 3 per cent.

Outlook for coming years

If the January-August sales-value run rate continues through December, residential sales value could reach approximately AED 23.9 billion in 2026, exceeding every annual total recorded in the report’s 2020-2025 series.

Noting that its outlook is a directional reading and not a forecast, the report suggests that studios and apartments are likely to remain the main drivers of activity as affordable launches dominate new supply.

Gross rental yields may compress in 2026 and 2027 if capital values rise faster than rents, it pointed out. Meanwhile, the large handovers scheduled for 2027-2029 will test whether demand can absorb the incoming supply, the report added.