Dubai residents use softer property market to seek cheaper homes

Some Dubai residents are taking advantage of a cooler property market after the outbreak of the Middle East war affected demand in the emirate. Steve, a 35-year-old media worker using a pseudonym because of sensitivity in Dubai around the subject, said he moved to a larger apartment closer to work just over a year after arriving in the city. He said the new rent was 15 percent lower than at his previous home. He said that when he arrived in Dubai in 2025, it had been hard to find a place in the area and rents had risen sharply.

Dubai's property market, described in the source as a pillar of the emirate's economy, had risen strongly in recent years as international high-net-worth individuals moved to the city. The source said the Middle East war, which began in late February, has slowed growth. It said targets in Dubai came under fire in the early days of Iran's retaliation against US allies in the region, including iconic sites such as Burj Al-Arab and the Palm Jumeirah. Hostilities resumed in July after an April ceasefire, but Dubai has not so far been in the firing line since then.

An anonymous real estate agent said Dubai's image as a city that is safe in all circumstances had not recovered from the earlier attacks. She said the market was in a "grey area", with some people seeing long-term regional instability and others viewing the moment as a buying opportunity. She said clients had not disappeared, but buyers had more room to negotiate, and that the market had shifted from a seller's market to a buyer's market since the war.

British real estate consultancy Knight Frank said prices in Dubai's mainstream market had fallen widely by between five and 20 percent, depending on location, after average growth of 82.9 percent since 2021. The source noted that Dubai's property market has previously been hit during the 2008 economic crisis and the Covid-19 pandemic.

Developers have continued to signal confidence in the market. Emaar announced a $55 billion project in central Dubai last month that it hopes will attract about 150,000 residents. Binghatti said it sold two luxury apartments in the centre in June, for $54 million and $19 million.

A report by the Betterhomes agency, based on official figures, said sales transaction values fell 45 percent year on year in the second quarter of 2026, with the luxury sector particularly affected. Betterhomes chief executive Richard Waind said conditions had improved in recent weeks, with demand rising again through June and into the current month in both buyer activity and completed deals. He said demand was mainly coming from Dubai residents rather than foreign investors. He also said this time of year is usually a lull period and projected that investment would begin to recover after the summer.