23/03/2026

BIZ & FINANCE MONDAY | MAR 23, 2026 17 Dubai property sector shows early signs of weakness

DUBAI: Dubai’s property market is beginning to show early signs of weakening as the US-Israeli war on Iran entered its fourth week, with data from analysts showing tanking transaction volumes and some real estate agents pointing to price reductions. 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% year-on-year in the first 12 days of March, and 49% month-on-month, Goldman Sachs analysts estimated in a note published this week. Some properties are already being offered at big discounts, with price cuts of 12-15%, according to some real estate agents and messages on social media that Reuters reviewed. 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 US$650,000, down about 12% from a previous price of US$735,000 “due to the current situation”. The agent spoke on condition of anonymity because of the sensitivity of the matter. An off-plan flat in Dubai’s coveted Palm Jumeirah was also being offered at a 15% discount to its original price to around US$2 million, according to a message reviewed by Reuters on a WhatsApp group created a week into the war. The UAE’s real estate boom has mirrored Dubai’s rise, but there were already concerns that the market was headed for a slowdown after five years of rising prices. 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 26% 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-Israeli conflict last June – although it said the median transacted price was only down 3% on a year earlier.

o Investors start looking for distressed deals as Middle East war hurts safe-haven image

A damaged building in the vicinity of Dubai Creek Harbour after a drone fell on it. – REUTERSPIC

contain the impact of the blockade. The Lulu retail chain, which has 280 supermarkets in the region, said it maintains four to six months of reserve stock of non-perishables and has chartered special flights to fly in fruit, vegetables, meat, seafood and poultry. So far, “37 special chartered flights have brought in more than 6,000 tons of fresh produce”, its communications director V. Nandakumar told AFP, adding that the additional cost was “not going to be passed on to the consumer as of now”. According to Schneider, “there is a certain level of preparedness and prices are elevated but under control for the moment”. However, “as the war does not seem to end soon, there is a tangible risk of a price spiral on imported goods, in particular food”, he added. – AFP Capital, told Reuters, citing Emirati clients and Indian family offices. Emaar Properties founder and chairman Mohamed Alabbar was sanguine, telling CNBC this month that “nobody wants to budge” on price. “At present, we are not seeing widespread discounting, as most buyers remain focused on long-term value rather than short-term price fluctuations,” said Tauseef Khan, founder and chairman at Dugasta Properties. – Reuters

claims to have four to six months of stock. And Qatar has invested heavily in its strategic reserves, following the three-year blockade imposed by its neighbours in 2017. Bahrain and Kuwait, on the other hand, are already seeing consumers paying the price for the conflict. After a rush on supermarkets in the first days of the war, Kuwaiti authorities froze the prices of certain basic products and subsidised meat imports. “Overall, prices have remained stable,“ an official from the Kuwaiti commerce ministry told AFP, speaking on condition of anonymity. “But an increase of more than 30 percent was recorded for meat and fish,“ which were affected by the suspension of fishing in the Gulf and the halt of imports from Iran, India and Pakistan, he said. The private sector is also trying to One circa-US$25 million off-plan unit on the Palm was sold to former UFC heavyweight champion Francis Ngannou last 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

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.”

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 1% population growth in Dubai this year, and 2-2.5% annually between 2027 and 2031, against 4% in recent years. They said that in their bearish case for Dubai, property prices would drop by an average of 7% annually between this year and 2028. However, executives on the

Strait of Hormuz blockage drives up Gulf food bills DUBAI: In a supermarket in Bahrain, Mahmoud Ali fills his cart as usual. The shelves remain stocked despite the war in the Middle East, but the blockade of the main shipping routes into the Gulf is now being felt at checkout. suspended or heavily reduced cargo processing,“ said economist Frederic Schneider, from the Middle East Council on Global Affairs. networks by adding logistics routes and operational corridors to handle containers and cargo diverted from the country’s eastern ports, according to officials in the transport sector.

Air transport, another logistical pillar of the region, is also running below capacity because of daily Iranian drone and missile attacks, he added. With the main gateways to the Gulf – the ports of Abu Dhabi, Jebel Ali in Dubai and Dammam in eastern Saudi Arabia – almost inaccessible, ships are turning to others located south of the strait in Oman and the Emirates. Saudi Arabia has also positioned itself as a key supply hub at the heart of the Gulf region, as its airspace remains open and maritime traffic to its Red Sea ports continues. To address the disruption of traffic in the ports along the Gulf coast, the kingdom has launched a new initiative to strengthen its transport

AFP journalists recently saw a stream of heavy trucks crossing the border with Qatar. Other land-based alternatives exist, including road corridors linking to the Mediterranean through Syria or Jordan. But these overland routes are too congested, expensive and insufficient to make up for the paralysis of traditional routes, Schneider said. Fresh products, most of which are imported from Asia and cannot be stored for long, are the first to be affected. Faced with this situation, the Gulf states are not on equal footing. Saudi Arabia has direct access to the Red Sea. The United Arab Emirates

“There’s no shortage”, but over the past few days “there has been a noticeable increase in the price of certain food products”, the father of four said. The price of meat in particular has almost doubled, he added. Like most of its neighbours in this arid region, the small Gulf monarchy depends heavily on imports, especially for its food supply. But the war, triggered on February 28 by Israeli-US strikes against Iran, has severely disrupted the transport of goods through the strategic Strait of Hormuz, which is effectively closed. “Most major ports in the UAE, Qatar, Kuwait and Bahrain have