Since 2024, the Dubai real estate index has soared. The war clipped his wings. Is this the end of the boom for a long time? Some analysts believe that the local market still has great potential for reconstruction. Several advantages are very strong.
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The Dubai property index has plummeted
The property index in Dubai fell by 30%. in connection with the war in the Middle East — reports the Ukrainian website UNN. “The market effectively lost all the surpluses it had generated since the beginning of 2026. This decline was one of the largest in recent years,” we read.
The war turned the situation on the local real estate market upside down. At the beginning of 2026, the index recorded a record growth rate, and was already climbing strongly. In 2024, it increased by approximately 63%, and in 2025 by another 30%.
See also: Big business is fleeing Dubai. Offices are being evacuated
“Dubai became one of the world's main capital centers before the war. Investors from Europe, Asia and post-Soviet countries actively flocked to the city. Additionally, the market was supported by large construction investments, an influx of tourists and the active development of the financial sector. However, the situation changed dramatically at the end of February,” writes UNN.
After the first attacks on Iran, on March 1, a drone attacked Dubai International Airport. The attack damaged one of the terminals, which led to an evacuation and the operations of the main airport hub were temporarily suspended. Later, another drone crashed at the Marina Hotel in the city's tourist district.
On the same day, there was another attack near the second terminal of DXB airport, which led to another suspension of flights. Later, an Iranian drone attacked the Dubai International Financial Center (DIFC) building.
Will real estate in Dubai come back into favor like before the war?
Despite the sharp decline, some analysts believe that Dubai's real estate market has great potential for recovery. In previous years, it has repeatedly demonstrated its ability to quickly respond to crises.
“The key factor will be the further development of the conflict in the Middle East. If hostilities do not spread to other countries in the region and the security situation stabilizes, investors may return to the market quite quickly. However, in the event of a prolonged war or new attacks on the territory of the UAE, the decline may continue,” we read.
See also: This is the new reality in Dubai. Hotels reacted to the war
At the beginning of the year, the real estate market in Dubai offered investors high rates of return on rentals, ranging on average from 6 to 9 percent. annually. A key asset of this region was friendly tax systemcharacterized by no personal income tax and an attractive Golden Visa program for buyers of real estate of a certain value.
Although recent geopolitical tensions and drone attacks in the region are causing temporary uncertainty in financial markets, the fundamental demand for luxury assets in Dubai is highly resistant to crises. However, investors must take into account the risk of oversupply of new premises, which, according to analyst forecasts, may lead to price corrections in some market segments this year.
Nevertheless, modern solutions, such as the recently introduced real estate tokenization, are constantly lowering the entry threshold and can attract new capital from around the world.
