Residents cash in on Dubai real estate cooldown amid war

Just over a year after moving to Dubai, Steve found himself moving unexpectedly up the property ladder, taking advantage of a cooling real estate market amid the Middle East war.
His new apartment is larger and closer to work than his previous resident, but the rent is nonetheless 15% cheaper, he said, using a pseudonym due to Dubai’s sensitivity on the matter.
When he arrived in Dubai in 2025, “it was really difficult to get a place in this area and the rents had gone up by a lot”, said the 35-year-old, who works in the media sector.
Dubai’s property market -- a pillar of its economy -- has soared in recent years, buoyed by the arrival of international high-net-worth individuals attracted by the glamorous lifestyle on offer in the emirate.
But the outbreak of the Middle East war in late February has dampened growth. Targets in Dubai came under fire in the early days of Iran’s retaliation against US allies in the region.
Even some of its most iconic sites, such as Burj Al-Arab and the Palm Jumeirah, were not spared, dealing a blow to the city whose population is more than 90% foreigners.
Hostilities resumed in July, following an April ceasefire, but Dubai has so far not been in the firing line.
But its image as a city that is “safe no matter what” has yet to recover from the blow it was dealt, said a real estate agent, speaking on condition of anonymity.
Today, she said, “we are in some sort of grey area. I’m getting a split sentiment; people think this has destabilised the region for a long time... And there are people who say this is the right time to invest.”
Clients have not completely disappeared, the agent said, but the margins for negotiation have expanded.
“Since the war, the market’s shifted from a seller’s market to a buyer’s market,” she said.
British real estate consultancy Knight Frank said “we have already noted prices ebbing widely across the city’s mainstream market by between five and 20%, depending on location”, after having surged by an average of 82.9% since 2021.
The market has been hit previously, notably during the 2008 economic crisis and the Covid-19 pandemic.