Dubai residents who were priced out of the property market for years are using a dip to get on the ladder.
Speculation that the housing market would face a major slump - driven in part by foreign media - has so far failed to come to fruition, with prices only edging down in the past two months.
But the situation has led to a rise in requests for deals, with prospective buyers returning to the market hoping to find better value.
Dubai’s property market has boomed year-on-year since recovering from the Covid-19 pandemic. This month, the sector saw its first decline in six years.
"Historically, Dubai has been a great place to get good rental returns and good capital appreciation, but what that has meant for some buyers is they've been priced out of the market,” said Luke Marston, associate director at real estate agency Century 21.
“These people are coming back to the market and trying to get the properties they want at a lower price.”
Another real estate expert said it was very much a buyer’s market in Dubai right now.
“Buyers, especially investors, are less risk-averse and looking for answers and clarity surrounding travel, tourism, supply chains and the wider economy,” said real estate veteran Mario Volpi.
“People want something they can understand and rely on.”
What the statistics say
The March 2026 Residential Values report from ValuStrat showed that the property market faced its first downturn since the Covid-19 pandemic, falling by an average of 5.9 per cent, and realtors believe this is likely to continue.
The start of the war hit the market the hardest, but further effects are expected to be felt in the coming six to eight weeks, according to Mr Marston.
Rental transactions remained 12.5 per cent below March 2025 levels, according to Betterhomes real estate agency.
“In the first two weeks [of the war] we saw a complete pause in the market. As people got a little bit more comfortable and could see what the UAE government was doing, we started to see a bit more momentum in the market,” said Mr Marston.
“If you look at the numbers in March itself, transactions were down 35 per cent for ready property or title deed transactions.”
The National toured a six-bedroom villa in Arabian Ranches with Mr Marston. The original listing price for the property was Dh13.75 million, but it has been reduced to Dh12.5 million.
Villas, which tend to attract end-user buyers, are less likely to see a market shake-up. Apartments, on the other hand, will be the most affected in the weeks and months to come.
“More owners want to get rid of their apartment properties – potentially they had them on long-term rent, or on an Airbnb basis where they were getting quick returns,” said Mr Marston.
"Now, that might not be happening enough for them, so they're looking to potentially liquidate this asset and move their money somewhere else.”
ValuStrat's report shows values of apartments in JVC, JBR and Burj Khalifa have declined by about 10 per cent on average, while the steepest monthly drops for villas were observed in Arabian Ranches 2 (down 11.5 per cent) and Dubai Hills Estate (a drop of 10.8 per cent).
People across Dubai are wondering if their rents will decrease. The answer is not clear-cut, with many landlords expected to play a waiting game.
“If they can afford to hold on to the property without incurring too much cost, landlords might wait because they don't want to get into the same situation they did in Covid, where they dropped the price and then they got locked in for multiple years where they could only increase by 5 or 10 per cent each year,” Mr Marston said.
“Landlords are wary of that, but there's also going to be a slight benefit for them to lower their prices to get people in the properties."
There is a changing outlook in the holiday home and midterm rental market, where tourists usually dominate but are noticeably absent. While tourism numbers are down, there has been a noticeable increase in the number of residents who want greater flexibility since the Iran crisis, according to one property management agency in Dubai.
Rohollah Rohparwar and Luis Santos, co-founders of First Class Property Management, told The National residents are trying to hedge their positions.
“During the uncertain period, some people are not sure if they will move from where they are, if they'll stay in Dubai or if they will maybe renew a long-term tenancy,” said Mr Santos.
“Many people are expecting that long-term rents will go down and these people are the ones that are looking into midterm rentals.”
Mr Santos estimated that, before the Iranian attacks, just under seven per cent of their clientele consisted of people renting midterm properties, falling in-between short and longer stays.
Now he estimates that number is closer to 70 per cent. While the number of tourists making up their customer base has fallen substantially, for obvious reasons, he says his company’s occupancy level, across more than 500 properties in Dubai, Abu Dhabi and Ras Al Khaimah, is close to 80 per cent. This is down only about ten percent from last year in the same period.
The effects of recent shifts will be felt well into the future, said Mr Santos. Currently in many cases, it is cheaper to book monthly rather than for an entire year.
Changes in the market
Now that renters have experienced a more flexible and customisable rental market, they will not settle for practices long considered to be the norm.
“They will expect flexibility, they will expect 12 cheques. I think there will be a bit of resistance to return to a one or two-cheque payment," Mr Santos said.
Even though short-term rentals were the first to fall, Mr Volpi believes they will be the first to recover – assuming tourism increases.
“If this conflict continues, we’re likely to see a shift towards longer-term leasing and more conservative rental strategies from landlords,” he said.
Another factor behind changes in the market is the arrival of new properties. As many as 80,000 off-plan units are meant to be handed over this year with the majority being apartments. Mr Santos expects this cool-down of prices to continue due to coming handovers, and Mr Marston agrees.
“Multiple stock is coming to the market of new off-plan projects launching,” Mr Marston said. “I think the buoyancy we've seen for the past few years with prices consistently increasing will start to peter out.”
Dubai was the first to feel the effects of the war on the market, with more international clientele and short-term options. Abu Dhabi, Mr Volpi says, will feel the effects eventually but could take longer to bounce back.
“Dubai responds quickly to external events. Abu Dhabi is steadier. It has a stronger domestic and institutional base, so the reaction is slower and less visible. It’s obviously not immune, but it’s less driven by short-term or immediate sentiment,” he said.
