Dubai has long been considered a safe and luxurious enclave in the turbulent Middle East. It’s one of the world’s top destinations for a tax-free, sun-soaked lifestyle, and has delivered exceptional returns for both commercial and private property investors in recent years.
Britons are especially fond of investing in property in Dubai; according to Sotheby‘s, they are the second largest group of purchasers after Indian buyers. And despite its geographical position, the idea of war affecting Dubai had been seen by many as unthinkable until now.
But the graphic image of incoming missiles from Iran has rattled a complacent mind. As of yesterday, Iran has launched 196 ballistic missiles and 1,072 drones at the United Arab Emirates.
And while it is too early in Donald Trump‘s campaign against Iran to see a profound change in property prices, agents have already noticed how the tense situation is affecting investors in the emirate.
‘Amid the ongoing conflict, our Dubai team is currently operating remotely,‘ says Leal Ignatius, director of international property at Hamptons.
‘In the days since the conflict began, activity has slowed, with new buyer leads down, and understandably new purchasers are choosing to pause on their purchasing decisions until a time when there’s greater clarity.‘
In the short term, a number of potential buyers will be abandoning or pausing plans to buy property in the emirate – but longer-term effects on the property market will depend on how long war persists.
Britons are especially fond of investing in Dubai; according to Sotheby’s, they are the second largest group of purchasers after Indian buyers
A thick plume of smoke rises from the port of Jebel Ali on the outskirts of Dubai
The timeline remains murky; Trump’s invasion thus far has appeared entirely unplanned and reactive, with US secretary of defence Pete Hegseth only adding to the lack of clarity by claiming that war could take ‘four weeks, two weeks, six weeks. It could move up, it could move back’.
You only have to look at Putin’s expectation that his four-year Ukraine invasion would last a few days to see how senseless predicting a war can be.
‘The conflict in the Middle East is creating significant geopolitical uncertainty, with the potential to impact economic confidence both within the region and globally,‘ says Liam Bailey, global head of research at Knight Frank.
‘In the near-term, a key indicator to watch will be movements in the oil price and whether there is any effect on inflation or interest rate expectations.‘
So is this a good time to invest in Dubai property?
While there may not be significant price drops in the near future, many experts believe that Dubai will continue to offer a stable property marketplace in the long term.
‘The Dubai real estate market tends to be driven by long-term fundamentals, such as population growth, investor demand, infrastructure development, and government policy,‘ says Ryan Booth, senior sales agent for Tyron Ash International Real Estate.
‘Historically, the market has demonstrated strong resilience to regional volatility.
‘In the immediate term we have observed that most buyers and investors are taking a “wait and monitor” approach, rather than withdrawing from transactions. Looking ahead over the coming weeks and months, we expect the market to remain fundamentally stable.
‘Dubai continues to benefit from strong inward migration, favourable tax policies, and significant ongoing development.
‘If the geopolitical situation stabilises quickly, which markets often anticipate, it is unlikely to have any sustained impact on property prices or transaction volumes.‘
However, some working in Dubai property have been less positive about the future, taking to social media to air their concerns about fears of a possible property crash.
Many buyers, spooked by reading about, seeing videos or even witnessing missiles overhead, may well wish to back out of a recently signed, or an off-plan property purchase in the emirate.
Yet being able to do so depends upon the contract and payment stage. In most cases, buyers cannot simply walk away without financial consequences.
US secretary of defence Pete Hegseth added to the lack of clarity by claiming the war could take ‘four weeks, two weeks, six weeks. It could move up, it could move back’.
A recently upgraded two-bedroom apartment located in the Dubai Star tower, one of the Jumeirah Lake Towers, is available with Hamptons from £306,171/AED 1,500,000
This six-bed villa on the exclusive Jumeirah Bay Island is available with Knight Frank from £40,822,800/AED 200,000,000
‘For ready-to-move-in properties, once a Sale and Purchase Agreement is signed and a deposit paid (typically five to 10 per cent), withdrawing usually results in forfeiture of the deposit,‘ says Elias Hannoush, managing director of Morgan‘s International Realty.
‘If transfer has been registered with the Dubai Land Department, backing out becomes legally complex and may involve penalties.
‘For off-plan properties, buyers are typically bound by the developer‘s Sale and Purchase Agreement.
‘If construction has commenced and payments are underway, cancellation is usually subject to penalties and may result in partial loss of funds.
‘UAE real estate law does provide structured mechanisms for cancellation if a developer fails to meet contractual obligations, but voluntary withdrawal by the buyer generally comes at a financial cost.‘
As of 2025, the Real Estate Regulatory Agency (RERA) Refund Rules for Off-Plan Property Cancellation indicate that if a project is less than 60 per cent complete, the developer may retain up to 40 per cent of the total contract value.
If the project is 60 per cent or more complete, the buyer can claim the remaining 40 per cent refund.
Should the project be 80 per cent complete or more, the developer is entitled to ask the buyer to follow the terms of the sale contract, and seize the paid amount.
For those wishing to withdraw from off-plan property investments, Go Dubai Real Estate advises reviewing the Sales and Purchase Agreement (SPA) carefully, looking especially at clauses related to cancellation, penalties and force majeure.
The Oqood registration acts as the official record of your transaction with the Dubai Land Department (DLD). If your property isn‘t registered in the Oqood system, your rights as a buyer are significantly weaker.
A formal written notice (such as an email or registered letter) should then be drawn, stating the intended reason for cancellation. Developers may be able to offer flexible solutions, such as reselling a unit to another investor or applying your payments as credit toward another project.
It‘s difficult to believe that the recent shocks won’t have a significant effect on buyers wishing to invest and settle down in the emirate.
However, few people in Dubai feel they can talk openly, as the UAE authorities have warned that posting negative stories could lead to prosecution.
‘If uncertainty persists, we may see longer negotiation periods, more selective buying, and a slight moderation in price growth rather than outright declines,‘ says Mr Hannoush.
‘Dubai‘s property market today is more regulated and transparent than in previous cycles, and escrow laws for off-plan projects provide buyer protection.‘
Nine tenths of the 3.4million population are foreign nationals – many being internationally mobile expats – and therefore do not have deep, emotional bonds to keep them in the country should tensions escalate or persist.
This will inevitably impact the property market, perhaps rather more significantly than Elias Hannoush predicts – particularly as ratings agency Fitch Ratings predicted last May, long before the current troubles, that prices could fall by as much as 15 per cent due to an oversupply of properties.
If you‘re thinking of buying in Dubai, at present the best plan seems to be to wait and see. If prices do start heading south, be ready to pick up a bargain.
Properties currently for sale
Located in the Dubai Star tower, one of the Jumeirah Lake Towers, this recently upgraded two-bedroom apartment is available with Hamptons from £306,171/AED 1,500,000.
This six-bed villa on the exclusive, man-made Jumeirah Bay Island is available with Knight Frank from £40,822,800/AED 200,000,000.
A one-bed waterfront property at Eltiera Residences, on Jumeirah Islands, is available with Morgan’s International Realty from £449,050/AED 2,200,000
