Market snapshot
Dubai’s property market is beginning to display early signs of weakening nearly three weeks into the U.S.-Israeli war on Iran, with analysts pointing to collapsing transaction volumes and some brokers reporting price cuts on select listings. Tehran’s strikes against Israel, U.S. bases and Gulf states including the United Arab Emirates have dented Dubai’s reputation as a sanctuary for wealthy buyers, according to market participants and analyst notes.
Transaction data and price movements
Goldman Sachs analysts calculated that real-estate transaction volumes in the UAE fell 37% year-on-year during the first 12 days of March and showed a 49% decline month-on-month. The same analysts noted that, on a value basis, the total of completed transactions so far this month was down by half compared with February - a fall larger than the declines seen during the 2024 Dubai floods or the previous Iran-Israeli flare-up last June. Despite the drop in activity, Goldman Sachs reported the median transacted price was only 3% lower than a year earlier.
Alongside the drop in volumes, anecdotal evidence from real estate agents and messages circulating on social media indicate some sellers are offering substantial discounts. Reuters reviewed messages and agent accounts showing price reductions in the range of about 12-15% on select properties. One listing near the Burj Khalifa was advertised for a "quick sale" at $650,000, down roughly 12% from an earlier price of $735,000, with the agent declining to be named because of sensitivity around the issue. A separate WhatsApp message reviewed by Reuters described an off-plan flat on Palm Jumeirah being offered at about $2 million, roughly 15% below its initial price.
Developer shares and market sentiment
Shares of listed property developers have reacted to the heightened uncertainty. Emaar Properties, the company behind the Burj Khalifa, has lost more than 26% of its value on the Dubai bourse since the war began.
Analysts at Citi flagged that the conflict has introduced "considerable risk" to Dubai’s future population growth assumptions. Citi now models 1% population growth in Dubai for this year and projects 2-2.5% annual growth between 2027 and 2031, compared with roughly 4% annual growth in recent years. In a bearish scenario, Citi said property prices could decline on average by 7% per year from this year through 2028.
Activity persists despite headwinds
Executives operating in Dubai emphasize that, while conditions have shifted, transactional activity has not stopped entirely. Imran Sheikh, founder and chairman at real estate investment firm BlackOak, said that although perceptions of risk vary among market participants, the data show transactions are still taking place. Sheikh cited a client from Africa instructing him to pursue opportunities over the next month.
Buyers continue to appear for high-end product. Developer Arada confirmed the sale this week of a circa-$25 million off-plan unit on the Palm to former UFC heavyweight champion Francis Ngannou, a transaction the company said "underscores continued investor appetite for branded luxury residences in Dubai."
Himanshu Khandelwal, CEO at Dubai-based investment firm Asas Capital, told Reuters that many investors have been asking for distress or discounted inventory and said they have Emirati clients and Indian family offices prepared to buy such assets.
Not all market participants see broad discounting. Emaar Properties founder and Chair Mohamed Alabbar told CNBC that "nobody wants to budge" on price. Tauseef Khan, founder and chair at Dugasta Properties, said to Reuters that "At present, we are not seeing widespread discounting, as most buyers remain focused on long-term value rather than short-term price fluctuations." These comments suggest a split in market behaviour between opportunistic buyers hunting for reductions and sellers or developers holding to longer-term valuations.
Outlook and context
Before the recent conflict, Dubai’s real estate boom had been driven by several years of rising prices, supported by an influx of affluent migrants drawn in part by the UAE’s tax-free regime. The current hostilities represent a critical test of that dynamic, with analysts and agents monitoring whether the fall in transaction activity and selective price cuts evolve into a broader market correction.
Currency: $1 = 3.6726 UAE dirham
Note on reporting - The reporting reflects analyst notes, statements from market participants and messages reviewed by Reuters; market participants quoted in this piece spoke on the record unless otherwise noted. Where agents requested anonymity, that is indicated.