Dubai's real estate market during a period of geopolitical instability: what's really going on

Partner Post with Dmitry Orlov — Head of Analytics at For You Real Estate

1. What is the current situation in the market right now?

It's not as alarming as many might imagine. If we look at the statistics, the first few days showed a fairly solid number of transactions: on Monday there were 874 deals totaling AED 2.5 billion, and on Tuesday 430 deals totaling AED 1.5 billion. These are average figures for us, although roughly 1.5 times lower than the previous week.

Naturally, some investors have decided to pause to observe the situation and make decisions later. Others are simply waiting for airspace to reopen so they can fly in and view properties in person.

From the perspective of brokers and developers, some companies have given their teams extra rest time, while others switched to remote work for a couple of days. However, most businesses continue operating as usual. In developers' sales centers, managers are still meeting clients, conducting viewings, and new leads continue to come in.

Sales are ongoing, although it's fair to say that the upcoming week will likely show weaker results compared to any week in recent months. However, this is expected.

We still need to keep working because even if the market slows down slightly, there is always a long queue of both investment funds and private investors ready to purchase properties that are priced below market value. Everyone understands that regardless of geopolitical circumstances, Dubai remains one of the safest locations with a zero-tax environment, so we do not expect major changes in the market. A short period of stagnation is possible, followed by continued stable growth.

2. Should business activity be paused?

Ultimately, everyone must decide for themselves. However, as mentioned earlier, transactions were happening, are happening, and will continue to happen.

Dubai has gone through many challenges before: the 2008 global financial crisis, $100 billion in external debt, regional conflicts, falling oil prices, and COVID-19, when GDP dropped by 7%. Each time, the market recovered.

The current situation is not an exception but simply another episode. During such periods, part of the buyer demand temporarily shifts from the primary market to the secondary market, and later the primary market regains its position. Therefore, I would recommend brokers focus more on the secondary market for now.

3. Is there a freeze on deposits or an outflow of buyers?

There is no outflow, only a pause. Almost no one who was considering purchasing before is now saying, "No, not Dubai."

There are simply no alternatives offering the same combination of returns, zero taxes, and security.

If there are occasional distress deals, they get absorbed by the market very quickly. Strong investors remain active in the market and are continuing to plan their next investments.