Dubai’s real estate market is beginning to show signs of weakening, almost three weeks after the start of the US-Israel war against Iran. Analyst data shows a plunge in transaction volumes and some real estate agents point to price reductions, Reuters reports.
Tehran’s war and attacks on Israel, US bases and Gulf states including the United Arab Emirates have damaged Dubai’s image as a safe haven for the world’s wealthy. Consequently, Real estate transaction volumes in the UAE fell 37% year-on-year in the first 12 days of March and 49% month-on-monthGoldman Sachs analysts estimated in a note published this week.
Some properties are already offered at deep discounts, with price cuts of 12 to 15%according to some real estate agents and social media messages reviewed by Reuters.
For example, one seller was looking for a “quick sale” for a property near the Burj Khalifa, the world’s tallest building, according to a message shared by an agent. The seller was seeking $650,000, about 12% less than a previous price of $735,000 “due to the current situation.” The agent spoke on condition of anonymity because of the sensitivity of the matter.
The UAE’s property boom has been reflected in the rise of Dubai, but before the war there were concerns about a slowdown after five years of rising prices. The dispute is the biggest challenge yet for the market, where demand has been driven by an influx of wealthy immigrants attracted by the UAE’s duty-free regime.
As a result, shares of real estate companies have fallen, and Emaar Properties (EMAR.DU), the developer behind Burj Khalifa, has lost more than 26% of its value on the Dubai Stock Exchange since the war began.
Goldman Sachs notes that the total value of transactions completed so far this month has halved compared to February – a much larger drop than during the Dubai floods of 2024 or a previous conflict between Iran and Israel last June – although it said that the average transaction price only fell by 3% compared to the previous year.
Citi analysts say the war has introduced “considerable risk” to Dubai’s population growth expectations as it could deter homebuyers and property investors.
The outlook is for property prices in Dubai to will fall on average 7% annually between this year and 2028.
