Dubai property slump: transaction volumes fall nearly half as war dents investor appetite

Dubai property shows early signs of weakening as regional war shakes investor confidence

Dubai has long been a magnet for global capital and a focal point for real estate investment in the Middle East. But the recent conflict involving the US, Israel and Iran has begun to unsettle that perception. In the first 12 days of March, real estate UAE transaction volumes plunged, and some sellers are already offering double-digit discounts. For buyers and investors who track housing prices and market cycles, this is a turning point that demands careful reading.

In plain terms: transaction activity has slowed sharply, some listing prices have been cut by 12–15%, and major developer shares have tumbled. Yet market participants on the ground report that deals are still happening. Our analysis shows this is a market in motion, not in freeze, and it requires a nuanced response from anyone with money at stake.

What the numbers say: sharp drops in activity, modest change in median prices

The most striking data point comes from Goldman Sachs analysts, who estimate that real-estate transaction volumes in the UAE fell by 37% year on year in the first 12 days of March, and by 49% month on month. That is a rapid cooling in deal flow over a short period.

Key figures to keep in mind:

• Transaction volumes (first 12 days of March): down 37% year on year
• Transaction volumes: down 49% month on month versus February
• Total value of completed transactions so far this month: down by 50% versus February, according to Goldman Sachs
• Median transacted price: down by 3% from a year earlier
• Reported listing discounts in some cases: 12–15%
• Emaar Properties shares: down more than 26% on the Dubai bourse since the war began

Those figures suggest a sharp reduction in turnover and liquidity, while price declines have been more contained so far. The split between falling volumes and modest median price movement is important: it points to a market where motivated sellers and opportunistic buyers are active, but many listings may not be trading until a buyer accepts a lower price.

Representative examples

• An apartment near the Burj Khalifa was being offered for a “quick sale” at US$650,000, down about 12% from a previous price of US$735,000.
• An off-plan flat on Palm Jumeirah was marketed at around 15% below its original price of roughly US$2 million, according to messages reviewed by Reuters.

These examples are anecdotal but consistent with agent reports from WhatsApp groups and direct conversations with market participants.

Why the conflict matters for Dubai property and the UAE housing market

Dubai’s attraction rests on more than sun and luxury towers. It is a tax-friendly environment, a magnet for high-net-worth migrants, and a hub for international businesses. That model depends on stability and perception. The current conflict has punctured that safe-haven image and injected risk into assumptions about migration and capital inflows.

Analysts at Citi have reworked their demographic outlook for Dubai and now assume 1% population growth in Dubai this year, and 2–2.5% annually between 2027 and 2031, versus around 4% in recent years. That slowdown in population growth expectations directly affects demand for housing, rental markets, and the absorption of new supply.

Citi’s downside scenario projects an average annual price decline of 7% per year between 2026 and 2028. That is a forceful scenario that would move parts of the market into a meaningful correction if it were to occur.

Developers and listed equities have felt the immediate impact. Emaar Properties shares are down more than 26% since the conflict began, reflecting investor concern about future sales, financing and a possible slowdown in new arrivals.

What market participants are actually doing: buyers, sellers and developers

On the ground, the situation is mixed. Some agents and buyers speak of price reductions and urgent sales; developers and major market players emphasise long-term value and steady demand.

Voices from the market include:

• Imran Sheikh, founder and chairman at BlackOak, who says transactions have not stopped and that some clients are actively seeking purchases.
• Himanshu Khandelwal, CEO at Asas Capital, who reports Emirati clients and Indian family offices calling to buy discounted or distressed assets.
• Mohamed Alabbar, founder and chair of Emaar Properties, who says “nobody wants to budge” on price, indicating that broad-based discounting is not visible from the developer side.
• Tauseef Khan, founder and chair of Dugasta Properties, who notes buyers are focused on long-term value rather than short-term price moves.

At the same time, a notable sale did complete: an around US$25 million off-plan unit on the Palm sold to former UFC heavyweight champion Francis Ngannou. Developers point to such transactions to show sustained appetite among certain wealthy buyers for branded luxury projects.

Taken together, these signals show a bifurcated market where high-net-worth buyers still chase trophy assets, while transactional activity in mid-market and secondary sectors is more sensitive and may require price adjustments.

Risks for buyers and investors: what to watch for now

If you are evaluating real estate UAE exposure, here are practical risks to factor into your due diligence:

• Liquidity risk: A 50% drop in the completed transaction value versus February implies slower exits and longer marketing times. That affects flipping strategies and short-term investors.
• Price risk: Citi’s bearish path of -7% per year through 2028 should be treated as a plausible stress scenario, particularly for newly completed or speculative projects.
• Demand risk tied to population growth: A lower growth trajectory for residents will reduce absorption of new supply, pressuring rental yields and resale values.
• Financing and currency risk: Tighter lending standards or higher financing costs during geopolitical shocks can increase carrying costs for leveraged buyers.
• Reputational and regulatory risk: Geopolitical incidents could trigger temporary mobility restrictions, insurance cost increases, or reputational effects that depress demand for some project types.

These risks are not hypothetical. They are already priced into developer equities and are visible in transaction flows.

Opportunities and strategy: how experienced investors can respond

We are not issuing prescriptions, but in our view there are disciplined ways to act if you want exposure to Dubai property while managing risk:

• Seek price transparency: Verify comparable transactions.