ISTANBUL

Housing sales in Dubai have fallen 25% since the escalation between Iran, the US and Israel began late last month, while the Dubai Financial Market Real Estate Index has dropped by more than 25% over the past month.

The conflict has triggered a marked slowdown across key sectors in Gulf economies, particularly energy, trade routes, logistics, finance, and tourism.

In the first 20 days of the war, the scale of economic disruption across the region became increasingly evident. Dubai’s real estate sector has been negatively affected by the crisis, which began with US and Israeli attacks on Iran on Feb. 28 and continued with Iran’s retaliatory strikes.

Long regarded as a global hub for tourism and property investment, Dubai had attracted international buyers with high returns and tax advantages, but the widening conflict has weighed on housing demand.

According to DXB Interact data, housing sales fell to 6,129 in the two weeks between March 2 and 16, down from 8,199 in the Feb. 16-March 1 period – a 25% decline.

Transaction volume also dropped 25.7%, from $7.55 billion to $5.61 billion over the same period.

Meanwhile, the Dubai Financial Market Real Estate Index, which tracks listed property companies, has declined by more than 25% in the past month.

Experts say the drop in transactions has not yet translated into price declines, but warn that prolonged conflict could reduce international investment.

- Prices did not drop but recovery will be difficult if war lasts long

Bayram Tekce, chairman of the Real Estate Service Exporters Association (GIGDER), said the Dubai real estate index saw declines of up to 30% amid the turmoil, though this did not indicate falling property prices but rather reduced transaction volumes.

He described the current situation as a cautious waiting period rather than a crisis, dismissing claims on social media that prices had dropped.

Tekce noted that sales fell sharply – by as much as 44.5% in the week of March 2 to 8 –while prices remained stable.

"Therefore, there is no decline in prices, I think developers will revive the market with discounts and campaigns if the war is short," he said.

"Everyone currently runs a 'wait and see' policy, but if the war lasts longer than three to six months, this situation will be a huge loss for the emirates and its recovery will take many years," he warned.

- Investment drops

International real estate expert Burak Ustaoglu said declines were most visible in sales and the real estate index, while reports of falling prices remained inaccurate.

He noted that some firms continued launches and campaigns, emphasizing that most purchases in Dubai are investment-driven.

"Purchases in Dubai generally happen for investment purposes," he said, adding: "Companies going for huge price discounts would cause them to lose their past investors and suffer a serious loss of trust."

He added: "No one wants to lose their past investors."

Ustaoglu said investors were uneasy amid the uncertainty. "This is a 'wait and see' period for everyone right now."

"It is not the right time to buy or sell, we think we need to wait a while for processes to become clearer."

He added that Dubai’s business-driven model, which attracts companies relocating their headquarters, would support a quick recovery if the conflict ends, but warned of deeper economic damage and possible price declines – especially in second-hand housing – if it persists.

"Therefore, our hope is that this war ends shortly," he said.

- Small pullbacks exist in 1% to 3% range

Another expert, Betul Isik, said claims that the market had come to a halt did not reflect reality, noting that activity had slowed but not stopped.

She said there was no "cancellation wave or panic selling trend" among Turkish or other foreign investors.

"Regarding the issue of prices falling, it is impossible to say there is a widespread and strong price decline across Dubai for now," she said.

Isik added that price movements were limited.

"Movement in the market average happens mostly in the form of limited corrections; in other words, there are small pullbacks in the 1% to 3% range."

She noted that discounts of up to 8% could appear in specific projects but do not signal a broader market decline.

"These do not mean a general market decline," she said.

"Developers already prefer to keep sales alive by flexing payment plans instead of breaking prices," she added.

Isik also highlighted Dubai’s diverse investor base from Europe, Asia, Russia, and CIS countries, which helps sustain resilience during crises, adding that Turkish investors were also acting cautiously rather than reactively.