⊞ Executive Summary — Issue #12
- Australia’s new foreign resident CGT rules have been in force since 1 October. The changes widen what counts as taxable Australian real property, apply the principal asset test across the full 365 days before a sale rather than on the sale date alone, and add a new notification requirement for some vendors who sell shares or units. The 15% withholding rate with no minimum threshold has applied since 1 January 2025. October 1 changed who and what is caught, not the rate. See our legal guide.
- The RBA raised the cash rate to 4.60% on 29 September, and the AUD fell below 70 US cents. It was the fourth hike of 2026 and the board voted unanimously. Governor Bullock said the board had also discussed a pause, and that she hoped four hikes would be enough. With a softer outlook for further hikes, the AUD fell 0.4% to 0.6989 on the day and was at 0.6943 by 2 October. AED 2 million now costs about A$785,000, around A$8,000 more than last week. Our finance guide covers hedging.
- Dubai home sales rose 8.0% to 2,299 transactions worth AED 4.98 billion. JVC led again with 191 sales, followed by Dubai Investment Park (156) and Dubai South (155). Off-plan made up 66.9% of sales. The strongest growth came from the AED 2–5 million band, which added AED 233.6 million in weekly value. Sales above AED 10 million slowed to 37 homes. See our market analysis.
- Nine-month figures show a strong year that is still well below 2025. W Capital’s analysis of DLD data puts sales from January to September above AED 380 billion. That is the second-highest nine-month total on record, but about 23% lower than 2025’s AED 495.8 billion. Q3 sales value was roughly 45% lower than Q3 2025. Mortgage transactions rose 14% to AED 150.6 billion, so a larger share of buyers are now using finance.
- UAE borrowing costs are rising. The UAE Central Bank raised its base rate to 3.90% on 17 September, in line with the Fed. Three-month EIBOR, the benchmark for most variable UAE mortgages, reached 4.22% on 2 October, up from 4.00% a month earlier. Markets are pricing a better-than-70% chance of another Fed hike in October. Buyers planning to use a UAE mortgage should get rate quotes now.
- Smartraveller kept the UAE at Level 3 (“Reconsider your need to travel”) for the whole coverage week. Update: on 8 October, after this week closed, the advice was lowered to Level 2 (“Exercise a high degree of caution”). Always check the live advice at smartraveller.gov.au before you book.
- Abu Dhabi passed its full-year 2025 home sales total on 2 October, with three months of the year still to go. Year-to-date sales reached 21,468, against 21,414 for all of 2025. That week it recorded 492 sales worth AED 2.08 billion, up 32.6%.
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Key Developments
⚖️ Foreign Resident CGT Changes Now in Force — What Actually Changed on 1 October
What happened
The ATO confirms that the foreign resident CGT measures started on 1 October 2026, now that the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Act 2026 is law. There are four changes: (1) a broader definition of taxable Australian real property (TARP), including a new definition of “real property” and the addition of water rights; (2) the principal asset test, which decides whether shares or units in an entity are “indirect” Australian property, now applies across the 365 days before a sale instead of only on the sale date; (3) a new requirement to notify the ATO for foreign resident vendors who declare that their membership interests are not indirect Australian real property interests; and (4) a transitional 50% CGT discount for eligible foreign residents selling certain Australian renewable energy assets.
Why it matters for Australians
Most Australians living in Dubai who hold an Australian investment property directly are already inside the regime. The 1 October changes matter most for people who hold Australian property through companies, unit trusts or other entities. The 365-day look-back means a quick restructure just before a sale will no longer move an entity outside the rules. If you sell shares or units and declare that they are not Australian property, you now have a filing obligation. Take these points to a tax adviser who understands both Australian residency rules and UAE arrangements. Our legal guide gives the wider context.
🏦 RBA Hikes to 4.60%, Then Signals It May Be Done — AUD Falls Below 0.70
What happened
On 29 September the RBA raised the cash rate by 25 basis points to 4.60%. It was a unanimous decision, the fourth hike of 2026 and the highest cash rate in 15 years. The statement said some of the inflation risks flagged in August were “materialising” and that the board remained ready to raise rates “further if needed”. At the press conference Governor Bullock sounded less hawkish. She said a pause had also been considered and that she hoped this year’s four hikes would be enough. Cash-rate futures now price about 36 basis points of further tightening over the next 12 months. Standard Chartered expects an extended hold.
Why it matters for Australians
A rate hike does not always mean a stronger AUD. Markets had fully priced the hike, so the softer press conference and the US dollar near a two-month high pushed the AUD to its lowest level in nearly two months. At 0.6943, AED 2 million costs about A$785,000, compared with A$777,000 at last week’s 0.7012. On a AED 2 million purchase, every half-cent move in AUD/USD is worth roughly A$3,900. If you are converting AUD for a deposit or settlement in the next three months, consider staged conversions or a forward contract instead of a single transfer. If you borrow against Australian property to fund a Dubai purchase, your Australian loan rate has just gone up. Use 4.60% as your base case, and a further 25 bp as the stress test. See our finance guide.
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→ Show Me What My Budget Buys📊 Dubai DLD Week 28 Sep – 4 Oct — 2,299 Sales, AED 4.98bn, Up 8%
What happened
Projectory’s analysis of DLD data recorded 2,299 Dubai home sales worth AED 4.98 billion for 28 September – 4 October. That is up 8.0% in number and 7.1% in value from the prior week, which was revised to 2,128 homes worth AED 4.65 billion. Off-plan made up 1,539 sales (66.9%), up from 1,382. Ready homes made up 760 (33.1%), up from 746. Jumeirah Village Circle was the busiest community with 191 sales, ahead of Dubai Investment Park (156) and Dubai South (155). Azizi Venice was again the busiest project with 89 registrations, followed by Verdana Residence 5 with 55. The average sale was about AED 2.17 million.
Why it matters for Australians
The week Australia’s CGT changes started and the RBA hiked was one of Dubai’s busier weeks of September and October. As in Issue #11, Dubai’s buyers come from all over the world, and an Australian rate decision makes little difference to its weekly volumes. JVC topping the list for another week matters for yield investors. It is the most liquid mid-market apartment community in the city, so there are plenty of buyers if you later need to sell. Market analysis →
🏘️ The AED 2–5M Band Drives the Week — Premium Segment Cools
What happened
All of the week’s value growth came from homes under AED 10 million. That segment rose from AED 3.77 billion to AED 4.13 billion. The AED 2–5 million band added AED 233.6 million, the largest increase of any price band. At the top end, sales above AED 10 million fell to 37 homes worth AED 856.1 million, down from 42 homes worth AED 882.3 million. The week’s largest single transaction was a six-bedroom ready villa at Zaya Zuha Island, which sold for AED 79 million on 2 October.
Why it matters for Australians
Strong mid-market demand while the luxury end slows usually means end-users and investors are buying, not speculators chasing headline prices. For Australian buyers, an AED 2–3 million ready apartment in an established community can generate rent now, qualify for the 10-year Golden Visa, and is easier to sell than a trophy property. See our ROI guide and visa rules guide.
📈 Nine-Month Scorecard — Second-Highest on Record, But 23% Below 2025
What happened
W Capital’s analysis of DLD data for 1 January – 29 September 2026, released on 30 September, puts Dubai sales above AED 380 billion from more than 123,000 transactions. That is the second-highest nine-month total on record, behind 2025 (AED 495.8 billion from 157,306 transactions) and ahead of 2024 (AED 374 billion). September sales were AED 28.7 billion across 11,063 transactions. Q3 sales were about AED 92.3 billion from 37,124 transactions, against AED 169 billion from 59,044 in Q3 2025. Mortgages bucked the trend, rising 14% year on year to AED 150.6 billion.
Why it matters for Australians
Both of the following are true. 2026 is Dubai’s second-strongest year on record, and activity has clearly cooled from 2025’s peak. Q3 value was about 45% lower year on year. This is the correction we covered in should Australians buy during the 2026 correction? The 14% rise in mortgage value tells you who is still buying: people who finance completed homes and plan to hold them. That is the same group most Australian investors belong to. A cooler market usually means more room to negotiate on price, payment plans and developer incentives. Note that W Capital is a brokerage and its forecast of a busy Q4 is opinion. The historical DLD figures are the useful part.
💳 UAE Mortgage Costs Rising — EIBOR at 4.22%, Another Fed Hike Priced In
What happened
The dirham is pegged to the US dollar, so UAE interest rates follow the US Federal Reserve. After the Fed’s September increase, the Central Bank of the UAE raised its base rate by 25 basis points to 3.90% on 17 September, its first rise since 2023. Three-month EIBOR, the benchmark most variable UAE mortgages are priced on, was 4.22% on 2 October, up from 4.00% on 3 September. Markets are pricing a better-than-70% chance of another Fed hike in October. The US 10-year Treasury yield is around 5.2%.
Why it matters for Australians
Non-resident buyers can usually borrow up to about 60% of the value of a completed home from UAE banks, and many of those loans are priced at EIBOR plus a bank margin. Each 0.25% rise adds about AED 210 a month to a AED 1.5 million loan over 25 years. That is roughly A$1,000 a year, which comes straight out of net yield. If you plan to use UAE finance, compare fixed-rate quotes now and ask how long a pre-approval holds its rate. Our finance guide explains how non-residents borrow in the UAE.
🌏 Smartraveller: UAE Held at Level 3 All Week — Lowered to Level 2 on 8 October
What happened
Throughout the coverage week, Smartraveller’s overall advice for the UAE was Level 3: “Reconsider your need to travel”, citing the unpredictable security situation in the UAE and the region. The UAE had been at Level 3 since 17 June, when it was lowered from Level 4 (“Do not travel”), and was reviewed again on 2 September without changing level.
Why it matters for Australians
At Level 3, many Australian travel insurance policies exclude or limit cover. The move to Level 2 makes it more practical to fly over for inspections, settlements and Golden Visa appointments, but check your own policy before you book. Advice levels can change quickly. Buyers who cannot travel can complete purchases remotely through a power of attorney and DLD’s digital services. Check smartraveller.gov.au before any trip.
🏙️ Abu Dhabi Passes Its Full-Year 2025 Sales Total — With a Quarter to Spare
What happened
Abu Dhabi recorded 21,468 home sales between 1 January and 4 October 2026, passing its full 2025 total of 21,414 on 2 October. That week it recorded 492 sales worth AED 2.08 billion, up 32.6% in number. Off-plan made up 81.7% of sales. Al Reem Island was the busiest area with 122 sales, and The Artery Residences was the top project with 84.
Why it matters for Australians
Dubai is the main market for most Australian buyers, but Abu Dhabi is growing quickly. CBRE reported Abu Dhabi values up 21.6% year on year to Q2 2026, while Dubai’s growth has slowed. Abu Dhabi is far more dependent on off-plan sales, so check developer track records and escrow arrangements carefully. For investors who already own in Dubai, it is worth looking at as a second UAE market.
Questions Australians ask before buying from home
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→ Ask Our Dubai AgentOpportunities This Week
1. Run a Post-1 October Structure Check
If you hold Australian property through a company, unit trust or SMSF-linked entity and you are a foreign resident for tax purposes, have your adviser check the entity against the 365-day principal asset test and the new notification requirement before any sale. An ATO clearance certificate (residents) or a variation application (foreign residents) can reduce withholding if you apply before settlement. Legal guide →
2. Convert AUD in Stages While It’s Below 0.70
The RBA has signalled it is close to finished and the US dollar is strong, so the AUD could stay under 70 cents for a while. Converting in three or four tranches, for example a third now and the rest over the coming months, averages your rate and avoids putting everything through on one bad day. Forward contracts can lock in a settlement rate. Finance guide →
3. Target the AED 2–3M Ready Segment in JVC
The AED 2–5 million band led the week’s growth, and JVC led for volume again with 191 sales. A ready unit in this price range starts earning rent at handover, can be mortgaged, and qualifies for the Golden Visa at AED 2 million. In a cooler market, ask about price reductions and developer-paid DLD fees before you commit. ROI guide →
4. Lock UAE Finance Before an October Fed Move
With EIBOR at 4.22% and markets pricing another Fed hike, get pre-approval and fixed-rate quotes from two or three UAE banks now. A fixed rate for the first 3–5 years removes rate risk from your yield calculations while you hold the property. Finance guide →
Risk Register
UAE Rate Rises Squeezing Net Yield
HighEIBOR has risen 22 basis points in a month and another Fed hike is likely. Variable-rate borrowers will see higher costs at their next reset. Model your net yield with an extra 0.50% on the rate to see whether the property still covers its costs.
AUD Weakness Raising Entry Costs
HighAUD/USD fell from 0.7012 to 0.6943 in a week. If the RBA holds while the Fed keeps hiking, the gap between the two rates narrows and the AUD could fall further. Every 1 cent fall adds about A$11,000 to the cost of AED 2 million.
Softening Rents
MediumCBRE reported Dubai residential rents down 6.2% quarter on quarter in Q2 2026. With large handover volumes still to come, use current achieved rents in your calculations, not asking rents, and allow at least 5% for vacancy.
Cooling Volumes vs 2025
MediumQ3 sales value was roughly 45% lower than Q3 2025. Prices have held up better than volumes so far, but off-plan investors who expect quick resale gains should allow for slower sales and longer holds.
CGT Scope Errors for Entity Holders
MediumUnder the 365-day look-back, an entity’s property mix from months ago can decide its CGT treatment today. Missing the new notification requirement creates compliance risk. Get advice before you list any interest for sale.
Regional Security Volatility
MediumThe UAE was at Level 3 all week before moving to Level 2 on 8 October. Regional conflict can change the advice level quickly, which affects insurance, travel plans and short-term sentiment. Have a remote-purchase option, such as a power of attorney, ready.
Investor Type Recommendations
All Investors
- Recalculate your AUD budget at 0.69, not 0.70 or above. AED 2 million is now about A$785,000.
- If you are a foreign resident for tax purposes and hold Australian property through an entity, book a review of the 1 October changes.
- Check Smartraveller and your insurer before booking an inspection trip. The level changed on 8 October.
Rental Yield Investors
- Strong JVC volumes show the market is liquid, but softer rents and higher EIBOR both reduce net returns. Use conservative rent assumptions.
- Prefer cash purchases, or fixed-rate finance, while UAE rates are rising.
- Build in service charge increases of about 5% a year when you model net yield over 5–10 years. See our ROI guide.
Capital Growth Investors
- A cooler market than 2025 gives you more room to negotiate. Ask for discounts, waived fees and better payment plans.
- The Metro Blue Line corridor (International City, Silicon Oasis, Dubai Creek Harbour) remains a long-term infrastructure play ahead of the line’s 2029 opening. See our rail guide.
- Abu Dhabi’s record pace makes it worth a look for diversification. Check off-plan escrow and developer delivery records first.
- Plan to hold for at least 3–5 years. Q3 volumes show resale timelines are getting longer.
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🇦🇺 Australian Implications — Issue #12
Broader TARP definition, a 365-day principal asset test and a new notification requirement. 15% withholding with no threshold has applied since 1 January 2025. Legal guide →
Fourth hike of 2026, unanimous. The Governor signalled four hikes may be enough. The next meeting is 3 November. Finance guide →
AUD/USD 0.6943 (2 Oct). AED 2M ≈ A$785,000 and AED 1M ≈ A$392,000. Consider staged conversions or forward contracts.
Level 3 throughout the coverage week. Lowered to Level 2 on 8 October. Check your insurer’s terms at smartraveller.gov.au.
Not required for Australians buying in Dubai. FIRB is a separate question from CGT residency status.
UAE base rate is 3.90%. 3M EIBOR is 4.22%. Non-resident loans usually go up to about 60% of value on completed homes.
Issue #12 — Frequently Asked Questions
What did the RBA decide on 29 September 2026?
The Reserve Bank of Australia raised the cash rate by 25 basis points to 4.60%. It was a unanimous decision, the fourth hike of 2026 and the highest cash rate in 15 years. Governor Bullock said a pause was also discussed and that she hoped four hikes would be enough.
Why did the Australian dollar fall after the RBA rate hike?
Markets had already priced in the hike, so attention shifted to the softer press conference and a strong US dollar. The AUD fell 0.4% to 0.6989 on decision day and was at 0.6943 on 2 October 2026.
Did the 15% foreign resident CGT withholding rate start on 1 October 2026?
No. The 15% foreign resident capital gains withholding rate, with no minimum property value, has applied since 1 January 2025. The 1 October 2026 changes widened the scope of the regime rather than changing the rate.
Who is most affected by the 1 October 2026 foreign resident CGT changes?
Mainly foreign residents who hold Australian property through companies, unit trusts or other entities. The principal asset test now looks back over the 365 days before a sale, and some vendors selling shares or units must notify the ATO.
How are UAE mortgage rates changing in 2026?
The UAE Central Bank raised its base rate to 3.90% on 17 September 2026, and three-month EIBOR reached 4.22% on 2 October. Each 0.25% rise adds about AED 210 a month to a AED 1.5 million loan over 25 years.
How did Dubai property sales perform in the first nine months of 2026?
Sales exceeded AED 380 billion from more than 123,000 transactions, the second-highest nine-month total on record but about 23% below 2025. Q3 sales value was roughly 45% lower year on year, while mortgage value rose 14% to AED 150.6 billion.
Which price band led Dubai home sales from 28 September to 4 October 2026?
The AED 2–5 million band added AED 233.6 million in weekly value, the largest increase of any band. Sales above AED 10 million slowed to 37 homes worth AED 856.1 million.
How is Abu Dhabi’s property market performing in 2026?
Abu Dhabi passed its full-year 2025 home sales total on 2 October 2026, reaching 21,468 sales year to date against 21,414 for all of 2025. Off-plan made up 81.7% of sales that week.
How can Australians get local guidance on buying property in Dubai?
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New rules. A weaker dollar. Rising rates. One conversation.
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| # | Publisher | Topic | Date | Link |
|---|---|---|---|---|
| 1 | Projectory | 28 Sep–4 Oct 2026 weekly — 2,299 sales, AED 4.98bn; Abu Dhabi milestone | Oct 2026 | projectory.ae |
| 2 | ZAWYA / W Capital | Nine-month 2026 DLD sales analysis | 30 Sep 2026 | zawya.com |
| 3 | ATO | Strengthening the foreign resident CGT regime — commenced 1 Oct 2026 | Oct 2026 | ato.gov.au |
| 4 | Clayton Utz | FRCGW 15% rate, $0 threshold from 1 Jan 2025 | Dec 2024 | claytonutz.com |
| 5 | FXStreet / BBH | RBA hike to 4.60% — statement and Bullock remarks | 29 Sep 2026 | fxstreet.com |
| 6 | PrimeXBT | AUD falls to 0.6989 after fourth hike; Fed October pricing | 29 Sep 2026 | primexbt.com |
| 7 | TMGM / Standard Chartered | RBA seen on extended hold | 29 Sep 2026 | tmgm.com |
| 8 | ValutaFX | AUD/USD 0.6943 | 2 Oct 2026 | valutafx.com |
| 9 | Metropolitan | UAE base rate 3.90%; 3M EIBOR 4.22% | 5 Oct 2026 | metropolitan.realestate |
| 10 | Khaleej Times | Fed hike impact on UAE borrowers | 15 Sep 2026 | khaleejtimes.com |
| 11 | Smartraveller | UAE travel advice (live) | Live | smartraveller.gov.au |
| 12 | Travel And Tour World | UAE moves from Level 3 to Level 2 (8 Oct) | 9 Oct 2026 | travelandtourworld.com |
| 13 | Gulf News / CBRE | Q2 2026 — rents −6.2% QoQ; Abu Dhabi values +21.6% | Jul 2026 | gulfnews.com |