UAE property market tumbles after Iranian attacks
Real estate in Dubai (Photo: Getty Images)
The real estate market in the United Arab Emirates may face a serious test after Iranian missile strikes, which have challenged the region’s image as a safe haven for foreign capital, according to Reuters.
The long-term real estate boom in the UAE could face a serious challenge after missile strikes by Iran, which have undermined the reputation of Gulf states as safe places for investment.
Reuters notes that attacks affected airports, ports, and residential areas of Dubai and Abu Dhabi (including damage from debris of intercepted drones and missiles), raising concerns about regional stability.
According to brokerage company Betterhomes, in 2025, about 65% of housing transactions in Dubai were off-plan sales. This means that a significant part of demand depends on foreign investors’ confidence.
After news of the attacks, shares of the largest developers fell sharply. In particular, shares of Aldar Properties and Emaar Properties — the developer behind the development of central Dubai and the Burj Khalifa — dropped by about 5%.
In addition, developers' bond yields rose sharply, effectively closing the debt financing market for new placements.
Investors are being reassured
Despite the Iranian attacks, some developers are trying to reassure investors. CEO of luxury developer Dar Global Ziad El Chaar said that the economic fundamentals of Gulf countries remain strong and that all company projects are being implemented according to plan.
However, bankers and market participants say the effects are already being felt. Some companies have postponed plans to raise financing, and investors have become more cautious due to rising risks in the region.
Reuters recalled that the real estate boom in the UAE significantly strengthened after the COVID-19 pandemic, when the country attracted wealthy foreigners due to no income tax, liberal visa rules, and a favorable business climate. After the start of Russia’s full-scale war in Ukraine, Russian businessmen and investors also began relocating to the country.
Experts estimate that if geopolitical tensions persist, international lenders may reduce financing for new projects, posing a serious challenge for the real estate sector.
Iran attacked the UAE
On February 28, the first day of the US and Israel operation against Iran, the media reported that Tehran was attacking several Gulf countries, including the United Arab Emirates.
Later, information appeared that the UAE successfully intercepted Iranian ballistic missiles that were attacking its territory. As a result of falling debris, people and buildings in Abu Dhabi and other locations were damaged, and people were injured.
Later, Axios reported, citing sources, that the UAE was considering possible military action against Iran.
RBC-Ukraine also reported that, in Dubai, an incident was recorded: a drone was found near the United States Consulate.
By the way, debris from a Russian drone Geran-2 was found in Dubai, suggesting that Tehran may have used Russian-made drones in its attacks.
