Dubai’s property market is starting to indicate early indicators of weakening almost three weeks into the US-Israeli battle on Iran, with knowledge from analysts exhibiting tanking transaction volumes and a few actual property brokers pointing to cost reductions.
The battle, and Tehran’s strikes in opposition to Israel, US bases and Gulf states together with the United Arab Emirates, have pierced Dubai’s picture as a protected haven for the world’s rich.
Actual-estate transaction volumes within the UAE fell 37 % year-on-year within the first 12 days of March, and 49 % month-on-month, Goldman Sachs analysts estimated in a observe revealed this week.
Some properties are already being supplied at massive reductions, with value cuts of 12-15pc, based on some actual property brokers and messages on social media that Reuters reviewed.
As an illustration, a vendor was searching for a “fast sale” for a property near the Burj Khalifa — the world’s tallest constructing — a message shared by an agent learn. The vendor was searching for $650,000, down about 12pc from a earlier value of $735,000 “as a result of present scenario”. The agent spoke on situation of anonymity due to the sensitivity of the matter.
An off-plan flat in Dubai’s coveted Palm Jumeirah was additionally being supplied at a 15pc low cost to its authentic value to round $2 million, based on a message reviewed by Reuters on a WhatsApp group created per week into the battle.
Heading for a slowdown?
The UAE’s actual property increase has mirrored Dubai’s rise, however there have been already issues that the market was headed for a slowdown after 5 years of rising costs.
The battle is the most important take a look at so far for the market, the place demand was fueled by an inflow of rich migrants attracted by the UAE’s tax-free regime.
Goldman Sachs said the total value of completed transactions so far this month was down by half compared with February — a much bigger drop than during the 2024 Dubai floods or a previous Iran-Israel conflict last June — although it said the median transacted price was only down 3pc on a year earlier.
Analysts at Citi say the war introduced “considerable risk” for Dubai’s future population growth expectations as it could deter home-buyers and property investors. They now assume 1pc population growth in Dubai this year, and 2-2.5pc annually between 2027 and 2031, against 4pc in recent years.
They said that in their bearish case for Dubai, property prices would drop by an average of 7pc annually between this year and 2028.
Activity has not stopped
However, executives on the ground are not panicking, saying market activity has not stopped.
“I believe everyone is very different in how they assess risk and how they perceive risk. But the data tells a very clear story, right? Transactions haven’t stopped,” said Imran Sheikh, founder and chairman at real estate investment firm BlackOak.
“We have one client from Africa who has said, if you see any opportunities over the next month, please go ahead,” Sheikh said.
One circa-$25 million off-plan unit on the Palm was sold to former UFC heavyweight champion Francis Ngannou this week, which developer Arada said “underscores continued investor appetite for branded luxury residences in Dubai”.
“There are many investors who are calling us to ask if you have clients who want to sell at distress or anybody who sells at a discount, (and say) we’re ready to buy it,” Himanshu Khandelwal, CEO at Dubai-based investment firm Asas Capital, told Reutersciting Emirati clients and Indian family offices.
Emaar Properties founder and chairman Mohamed Alabbar was sanguine. telling CNBC this month that “no person desires to budge” on value.
“At current, we aren’t seeing widespread discounting, as most consumers stay centered on long-term worth relatively than short-term value fluctuations,” Tauseef Khan, founder and chair at Dugasta Properties, stated. Reuters.
