Dubai property sector shows early signs of weakness
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The war, and Tehran’s strikes against Israel, US bases and Gulf states including the United Arab Emirates, have pierced Dubai’s image as a safe haven for the world’s wealthy.
Real-estate transaction volumes in the UAE fell 37 per cent year-on-year in the first 12 days of March, and 49pc month-on-month, Goldman Sachs analysts estimated in a note published this week.
For instance, a seller was looking for a “quick sale” for a property close to the Burj Khalifa — the world’s tallest building — a message shared by an agent read. The seller was looking for $650,000, down about 12pc from 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 conflict is the biggest test to date for the market, where demand was fueled by an influx of wealthy migrants attracted by the UAE’s tax-free regime.
Shares in property developers have fallen, with Emaar Properties, the developer behind Burj Khalifa, down more than 26pc on the Dubai bourse since the war began.
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.
They said that in their bearish case for Dubai, property prices would drop by an average of 7pc annually between this year and 2028.
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”.
Emaar Properties founder and Chair Mohamed Alabbar was sanguine, telling CNBC this month that “nobody wants to budge” on price.
