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There is excitement about the future of the UAE’s major cities and especially Dubai. In recent years, it has become one of the most dynamic real estate markets in the world. According to the analytical portal Prian, in 2024 about 225 thousand transactions totaling $187 billion were concluded in the emirate.
However, market participants are now recording the first signs of slowdown. According to the publication Moneycontrol, local brokers expect that amid the new Middle East crisis real estate deals may be delayed for months. Developers and agencies speak of a state of “shock” and tense expectation on the part of investors.
Investors have put the brakes on deals
Experts agree: in the coming days and weeks the number of transactions may noticeably decrease. Potential buyers and sellers prefer to take a wait-and-see attitude until it becomes clear how the situation will develop.
The key question is whether the conflict will affect the inflow of foreigners to the UAE. It is foreign demand that has provided much of the growth in recent years. If the hostilities drag on for months, the risks of a correction will intensify. However, with a quick settlement and no serious involvement of the Emirates themselves, demand may persist.
Rental rate
Practice has shown that the speculative model of making money in Dubai has already become less attractive: the rapid price growth of recent years has practically exhausted the potential for short-term resale. At the same time, the rental segment still shows resilience and yields remain competitive.
Prian analysts compare the current situation with the dynamics of the German market in the late 2010s. Then prices were also growing at an accelerated rate, and the predicted turnaround was postponed until the appearance of external shocks – the pandemic and the Ukrainian conflict, which became a trigger for correction.
In the case of Dubai, the military conflict around Iran may become not so much the root cause of the downturn as a signal for the long-awaited cooling.
So far, market participants agree on one thing: the further trajectory will directly depend on the timing and outcome of the conflict. A quick settlement will allow to maintain activity, while a protracted crisis will increase the pressure on the housing market of the whole region.
