Will the ongoing US-Israel-Iran war impact Dubai’s real estate market, which is likely to impact the mid-segment housing segment? Real estate experts say buyers who have already booked homes can renegotiate the terms or get higher discounts, while potential buyers can take a wait-and-see approach until the situation stabilises. He said some investors may also redirect capital towards premium residential projects in India.
He says if the struggle continues, the market could see a widespread decline in transaction volumes, new launches, investor sentiment and overall buying appetite. Mid-market buyers are expected to negotiate more aggressively in the coming months, while developers may defer new project launches. HNIs may reevaluate the timing of large investments and be more cautious about new commitments. Prolonged uncertainty may also lead to a modest shift of capital from Dubai to India, at least in the near term.
Amit Goenka, CMD, Nisus Finance, explains, “If the US-Israel-Iran war prolongs, the Dubai real estate market may see a decline in momentum due to volumes, new launches, investor sentiment and overall appetite. Buyers may adopt a wait-and-see approach or negotiate hard over the next few months to get a better bargain, but everything depends on the duration and how long the conflict lasts.” In February, the company announced the expansion of its UAE property portfolio ₹Investment of Rs 247 crore in residential apartments in Mazan, Dubai.
“After price appreciation of 18% last year and 24% last year, the same appreciation levels may not be sustained in the near term. New launches may be deferred, and HNI majors may reevaluate the timing of investments,” he said.
Properties in the mid-market segment (properties ₹from 3 crores ₹8 crore range), negotiations are expected to intensify, with end users looking for better deals and investors becoming more conservative about new commitments. Therefore, high-value transactions are likely to remain quiet for some time, he said, as HNIs may defer big-ticket purchases.
Amid a widespread selloff in the financial markets, there could be a temporary exodus to safety, with commodities like gold and silver rising. He said that along with this, equity and property remain under pressure.
Other experts said that while there is no clarity on how long the current situation may persist, Dubai has historically demonstrated resilience, recovering quickly from disruptions such as the COVID-19 pandemic and the 2008 Lehman crisis.
Also read: Dubai Real Estate: Ex Post suggests Mumbai, Bengaluru, GIFT City as alternatives, sparking debate
At this stage, “the impact on the real estate market is driven more by sentiment than any fundamental structural changes. It would be premature to draw any long-term conclusions at this point. Although such developments may create temporary uncertainty, the underlying fundamentals remain resilient. I am confident on a stable and sustainable path of growth ahead,” said Rizwan Sajan, founder and chairman of Danube Group.
What makes Dubai a popular real estate investment destination?
Dubai’s appeal as a property investment hub lies in its tax-friendly regime, residence-linked investment structure and attractive rental yields of around 6-8%. Experts say property prices have risen 20-40% in the last two years, which has been supported by Strong global demand.
According to a Knight Frank report, the share of Indians in property sales in Dubai was 10% in 2025, up from 6% in 2024. Many Indian real estate companies are also developing projects or planning new launches in the region.
It is also important to understand the buyer mix. ₹The Rs 3-8 crore mid-segment is largely supported by professionals and resident buyers, many of whom depend on mortgages. The ticket sizes above this are dominated by HNIs investing in ultra-luxury properties that offer returns as well as lifestyle value. ₹The Rs 3-8 crore price segment is virtually absent in prime locations in Dubai; Such budgets are generally suitable for areas like Ras Al Khaimah, Silicon Oasis, Furjan and Ajman, said a real estate expert on condition of anonymity.
Investor interest for ultra-high-end properties largely comes from two segments: ultra-high-net-worth individuals, including Indian business owners, and Bollywood stars, who invest in prime Dubai properties. A report by Knight Frank says demand for villas will overtake apartments among HNWIs in 2025, with branded residences also emerging as the preferred option.
What impact will the US-Israel-Iran war have on Dubai’s real estate market?
During periods of geopolitical uncertainty, property markets typically enter a phase of caution. Buyers adopt a wait-and-see approach and postpone closing the deal until there is more clarity. If tensions persist, some investors may delay purchases or negotiate more aggressively. Real estate experts say that in the short term, demand may be subdued as decisions have been postponed and rental yields may also come under pressure.
What happens next will largely depend on the duration of the crisis. He said a prolonged situation could lead to sentiment-based stagnation, slow transaction volumes, price correction and strong buyer-side interactions before stability returns.
“present situation middle east This is clearly making real estate investors more cautious, especially in markets like Dubai, which have long been considered safe and stable for investment,” said Piyush Lohia, managing director, Lohia Worldspaces.
“Although we are not seeing panic selling at this stage, there is a clear ‘wait and see’ approach among buyers. In the short term, this may slow down sales activity a bit as investors take time to re-evaluate the risks and timelines before making new decisions, especially with a large number of new units expected to enter the market this year.”
dubai market Offering attractive rental yields of 6-8%. “In the short term, some pressure on rentals may be seen, leasing activity is expected to remain low for the next six to eight months. Rentals may decline by 5-7%,” said an expert.
As far as new project launches are concerned, if uncertainty continues, they may be postponed by 2 to 3 quarters, which will lead to a slowdown in new supply. Notably, this year was projected to see a record supply of around 120,000 units, but experts said the current risks could bring a temporary recovery in the Dubai market.
Will the capital be shifted from Dubai to India due to US-Israel-Iran war?
Morgan Owen, ANAROCK Group’s managing director for the Middle East and North Africa, said investment redirection was possible. “Indians and other NRIs are one of the largest groups of buyers in Dubai, accounting for about 10% of sales in 2025. They are attracted towards high returns and low taxes,” he said.
“If risk perception continues to rise, a small but significant shift of capital from Dubai to India is possible,” he said, adding that Dubai’s structural appeal is likely to prevent sudden or impulsive reallocation.
Gaurav Gupta of Zeno Realty believes the current uncertainty in Dubai could prompt a small section of Indian HNIs to reevaluate allocations, including in premium Indian markets like Gurugram.
“But we are talking about a few hundred HNIs in the near term and at this stage, I don’t think it will trigger a meaningful capital exodus. Dubai today has a complete ecosystem infrastructure, tax efficiency, lifestyle, regulatory clarity. One episode is unlikely to reverse that flywheel. Only if this uncertainty persists for a long time, then yes, capital can meaningfully diversify towards centers like Singapore, London or even Indian luxury corridors. But while this is a one-time event, it is only a near-term issue compared to the beginning of a structural shift in capital flows,” he said.
Experts agreed that large-scale capital migration to other countries is unlikely, as few cities offer the same combination of affordable luxury, lifestyle appeal and global connectivity as Dubai.
As far as whether investors will sell assets in Dubai and redeploy capital to India, it seems unlikely. real estate specialist That said, currency devaluation and potential tax implications for NRIs may encourage many to retain or reinvest their wealth abroad.
Some experts believe in NRI investment indian real estate, A temporary slowdown may also be seen, especially in the luxury segment, amid the current geopolitical tensions. He said Gulf-based NRIs may hold off on investing in luxury homes until the situation stabilizes instead of buying high-value property in India.
