Dubai home sales value slides 47% as war uncertainty tests buyers

Dubai’s home sales lost nearly half their value in the third quarter of 2026 compared with a year earlier, as uncertainty surrounding the Iran war made buyers more cautious. Residential deals totalled Dh72.6 billion ($19.7 billion), down 47%, according to a Cavendish Maxwell report covered by The National — Business. The number of homes changing hands fell 38% to 34,000, marking a sharp slowdown in a market that had enjoyed years of growth.

The figures do not capture only decisions made during the quarter. Ronan Arthur, director and head of residential valuation at Cavendish Maxwell, said they combine recent purchases with earlier agreements because sales take time to reach formal registration. As that backlog clears, weaker buying activity is becoming more visible in the recorded totals. Buyers had become more restrained in the weeks and months after the conflict began, he said.

“Purchasing activity became more measured, with buyers being more cautious in the weeks and months following the start of the conflict.” — Ronan Arthur, Cavendish Maxwell

A slowdown beyond one quarter

The retreat extended across the first nine months of the year. Residential transaction numbers fell 23% from the same period a year earlier to 112,580, while their combined value dropped 27% to Dh292 billion, Cavendish Maxwell found. Off-plan homes—properties bought before completion—still dominated the third quarter, accounting for 72% of purchases and 65% of sales value. That left this part of the market at the centre of activity even as overall demand became more cautious.

Separate figures cited by S&P Global Ratings also pointed to a weaker market after the war began. Using Dubai Land Department data, the agency said total real estate sales averaged 12,644 transactions a month between March and September 2026. That was 26% below the monthly average of 17,198 in January and February. S&P also cited industry reports showing price declines of 5% to 15% between the end of 2025 and September 2026.

The reversal followed a boom supported by residency permits for retirees and remote workers, an expanded 10-year golden visa programme and growth in the UAE economy as it diversified. The war, which began in late February, brought a different backdrop. US and Israeli attacks on Iran, followed by Iranian strikes on energy sites and civilian infrastructure across the Gulf and Iraq, also disrupted hospitality, tourism and aviation.

Prices and investor sentiment in focus

S&P expects prices to adjust gradually rather than fall rapidly. It said continued government reforms and large infrastructure projects should support Dubai’s attractiveness over the medium term. But falling prices could encourage investors to sell, making secondary-market transactions—sales of existing properties rather than purchases from developers—more prevalent. The agency identified luxury and ultra-luxury homes as potentially most exposed to weaker investor sentiment and demand.

Emaar Properties founder Mohamed Alabbar also pointed to a possible 5% to 10% adjustment in the broader real estate sector because of the war. Speaking last month at AIM Congress in Dubai, he suggested activity could accelerate again if the situation settled. For now, Arthur said the underlying drivers of demand remained. The next signals to watch are the pace and number of new property launches, regional uncertainty and whether buyer activity continues to settle into a slower rhythm.