Dubai housing market stays resilient amid Middle East tensions; H1 residential deals touch AED 226 billion: ANAROCK

Dubai's residential real estate market remained resilient despite geopolitical tensions in the Middle East, with housing transactions worth AED 225.7 billion recorded in the first half of 2026, according to a new report by ANAROCK.

The report, Dubai Real Estate: Built on Vision. Proven by Numbers, said that while the Iran conflict briefly impacted buyer sentiment during March and April, the correction was largely driven by market psychology rather than weakening fundamentals.

According to the report, residential prices declined by just 4-7% between February and April 2026, even as the Dubai Financial Market (DFM) Real Estate Index plunged as much as 34% during the period—highlighting what ANAROCK described as the widest sentiment-to-asset gap witnessed during any Dubai market crisis.


Average residential prices in Dubai stood at nearly AED 1,900 per sq. ft. in H1 2026, compared with AED 1,800 per sq. ft. during the same period last year, reflecting an annual appreciation of around 6%.

"The report highlights that while geopolitical tensions briefly affected buyer sentiment during March and April 2026, the correction was largely sentiment-driven—not structural," said Aayush Puri, CEO – Residential, Middle East and CEO – ANAROCK Channel Partners (India).

He added that the recovery has been supported by robust market fundamentals, with off-plan sales accounting for nearly 70-77% of all residential transactions during the period, indicating sustained buyer confidence despite short-term uncertainty.

Investor confidence returns

The report noted that residential transaction enquiries slowed immediately after the geopolitical escalation but rebounded steadily once ceasefire efforts progressed. Weekly residential sales recovered to nearly AED 10 billion during the recovery phase, suggesting that investors continued to view Dubai as a long-term investment destination.

While residential transaction value in H1 2026 rose 15% over 2024 levels, it remained 16% lower than the exceptionally strong first half of 2025.

ANAROCK expects Dubai's residential market to continue benefiting from strong structural demand drivers, including rapid population growth, international migration and investor-friendly government policies.

Dubai added nearly 470 new residents every day in 2025, taking its population beyond 4.03 million. During the year, the emirate recorded over 206,166 residential transactions worth AED 547 billion—an 18% rise in transaction volumes and a 26% increase in value over the previous year. The report noted that transaction values have surged nearly tenfold from AED 54 billion in 2020.

The expansion of Golden Visa eligibility to include mortgaged properties is also expected to widen the pool of international buyers.

Buyer profile becoming more selective

ANAROCK believes Dubai's housing market is now entering a more selective phase where returns will increasingly depend on location-specific fundamentals rather than broad-based price appreciation.

Premium destinations such as Palm Jumeirah and Downtown Dubai are expected to continue attracting global wealth, while emerging infrastructure-led locations such as Dubai South could witness sustained long-term growth. However, supply-heavy mid-market locations may see relatively moderate price appreciation.

The report also highlighted changing buyer demographics in 2025.

Investors from more than 150 countries purchased residential properties in Dubai during the year, with Indians accounting for the largest share at 22%, followed by buyers from the UK (17%) and China (14%).

More than 129,600 new investors entered Dubai's property market in 2025, representing a 23% year-on-year increase. Around 80% of all transactions were funded through cash, insulating the market from interest-rate volatility.

Among buyers, 38% purchased homes for end-use, 28% for rental income, 21% to obtain Golden Visa residency, while 13% invested primarily for capital preservation.

Historical resilience

The report compared Dubai's performance during previous global and regional disruptions and found that the latest geopolitical conflict had one of the smallest impacts on residential prices.

During the Global Financial Crisis between 2008 and 2010, residential prices declined by nearly 40% and took about three and a half years to recover. The 2015-16 oil price collapse led to only a 2% correction, as oil contributes less than 1% to Dubai's GDP.

During the COVID-19 pandemic, residential prices fell around 6% before recovering within 13 months, while the Russia-Ukraine conflict in 2022 did not trigger any decline, with Dubai emerging as a beneficiary of global capital inflows.

The Iran conflict in 2026 resulted in a relatively modest 4-7% correction, with recovery already underway within four months, the report noted.

Outlook

Looking ahead, ANAROCK projects residential prices in Dubai to rise 4-7% during 2026 under its base-case scenario, supported by continued population growth, increasing international investor participation and supportive government policies.

In a more optimistic scenario driven by a sustained ceasefire and stronger investor confidence, residential prices could appreciate from 8% to 13%. However, the report cautioned that any resumption of regional conflict during the second half of the year remains the key downside risk for housing demand.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)