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Property sales have fallen sharply since the start of the war in the Middle East

2026-06-18 14:04:00, Kosova & Bota CNA

Property sales in Dubai have fallen "off a cliff", a leading market watcher said, after the war in the Middle East caused a dramatic slowdown in one of the world's most expensive real estate markets.

Sales in the city fell 19% in May compared with the previous month, accelerating from a 4% decline in April, researcher ValuStrat found.

Transactions are now below half their level compared to the same point last year, she said.

"The ready-to-move-in market has not recorded an annual decline of this magnitude since the pandemic," said Haider Tuaima, head of real estate research at ValuStrat, a Dubai-based consultancy that has been tracking the city's property market since 2014.

A separate study by Dubai-based research firm Reid found that 22.5 billion dirhams ($6.1 billion/£4.5 billion) worth of properties were sold in May, 42% below the April figure. According to the figures, which were first reported by Bloomberg, this was about half the 46.6 billion dirhams in the month before the conflict began.

Dubai, which is located on the eastern side of the Arabian Peninsula, has seen a property boom in recent years, driven by a wave of high-income earners attracted by the city's zero income tax policy.

But the outbreak of war in the Middle East in late February has shaken the market, with an Iranian missile hitting the five-star hotel in Dubai's famous Palm Jumeirah area in March.

It remains unclear how quickly the market can recover if a peace deal between the US and Iran remains strong.

Sellers of luxury villas and apartments in the city have shaved tens of millions of pounds off asking prices, according to estate agents.

Yasin Valimulla, a Dubai buying agent specializing in properties worth at least $10 million (£7.5 million), said the few home sales still taking place were at a discount of 20%-25% compared to their pre-conflict value.

"We have sold properties to very high net worth guys over the last year and a half - every one of them has now left Dubai," he said.

“There was a lot of panic in March and there’s still not a lot of clarity to this day,” he said. “Western European buyers are now hesitant to buy property here. I think they want to wait maybe a year, even two years. It depends on how things go.”

This marks a sharp correction for Dubai, which was the world's busiest city for luxury real estate last year. International real estate agency Knight Frank found that more homes worth $2.5 million to $10 million were purchased in Dubai than in any other city in the world by the end of 2025 - ahead of London, New York, Los Angeles and Hong Kong.

In the over $10 million category, there were 9,050 sales in Dubai compared to 6,577 in New York and 3,089 in London.

But the market is now correcting itself, Valimulla said. “The numbers were very high from the beginning, especially in the last two years. The market at that level was not sustainable anyway.

"There will be a correction in prices, we just don't know the impact of that correction until we have [geopolitical] clarity."

Meanwhile, the super-rich nomadic class is heading to other international hubs, such as Milan, London and Singapore.

Richard Waind, of real estate group Cencorp, added that some brokers in Dubai's once-booming property market will now be forced to close.

“The war has been a big, fast-moving event,” he said. “The slowdown in sales is putting pressure on those smaller agencies that were established in a volatile market. There were about 1,000 brokers in the market a decade ago - now there are about 10,000. That number will fall.”