Transaction activity in the United Arab Emirates real estate market has weakened materially since the start of the ongoing Middle East conflict, according to a note from Goldman Sachs analysts led by Harsh Mehta. The bank says heightened regional uncertainty is beginning to dampen property demand, with early-March data pointing to a clear slowdown.
Goldman reports that overall transaction values for the first half of March fell 31% year over year and declined 51% month over month since the conflict began. The analysts highlight that the pace of the drop in activity appears steeper than several earlier market disruptions.
By comparison, Goldman points out previous episodes of disruption in the market produced smaller month-on-month falls: around 19% during the Dubai floods in April 2024, roughly 32% during the Iran-Israel conflict in November 2024, and about 17% in June 2025. Those comparisons are presented by Goldman to show the relative magnitude of the current slowdown.
The bank says the deterioration accelerated in the second week of March. Transaction values in that period were down 42% year over year, a decline it says was largely driven by weakness in the secondary market, which decreased 59% year over year, and concentrated mainly in the villa segment where values fell 89% year over year.
Volumes also contracted sharply in the same window. Goldman notes total transaction volumes fell 38% year over year, attributing much of the reduction to a drop in the off-plan segment, which fell 52% year over year, and predominantly to apartments where volumes declined 59% year over year.
Price measures showed mixed signals through March 1 to March 12. Median apartment prices per square foot were down 3% year over year and 8% month over month. By contrast, villa prices remained higher on an annual basis, up 16% year over year, though they were down 2% compared with the previous month. Across property types the average price per square foot rose 1% year over year but fell 7% month over month over the same period.
The market-wide softness has coincided with sizable moves in equity valuations for prominent developers. Shares of Emaar Properties PJSC (DFM:EMAR), a major UAE developer behind projects such as the Burj Khalifa and Dubai Mall, have fallen nearly 40% since the start of the conflict, reflecting investor reassessment of the regional property outlook.
Analysis
Goldman’s transaction-level figures indicate that the current conflict has a pronounced near-term impact on buyer activity in the UAE market. The combination of reduced transaction values and lower volumes—particularly in secondary sales and off-plan apartments—signals a pullback in both immediate market liquidity and forward-looking purchases.
While median and average price measures show some divergence between property types, the sharp month-on-month drops highlight how quickly demand conditions have shifted. The data also underline heightened sensitivity in the villa market and the secondary segment, areas where price and activity volatility has been most acute according to Goldman’s reporting.
Key points
- Overall transaction values fell 31% year over year and 51% month over month since the conflict began - real estate sector impacted.
- Secondary market and villa sales showed the largest falls; off-plan apartments saw steep volume declines - affects developers and construction-related firms.
- Equity market reaction: Emaar’s shares are down nearly 40% since the conflict started - capital markets and investor sentiment impacted.
Risks and uncertainties
- Regional geopolitical uncertainty could continue to suppress property demand, prolonging lower transaction values and volumes - implications for real estate and financial markets.
- Concentrated weakness in the secondary market and off-plan segments may create pockets of liquidity stress for sellers and developers - impacts on developer cash flow and funding needs.
- Large equity price declines for major developers reflect investor reassessment of outlooks, which could influence access to capital for the sector - banking and capital markets exposure.
Note: All figures and observations in this report are taken from Goldman Sachs’ analysis of transaction data for early March and related commentary on market developments during the period in question.