Dubai, Abu Dhabi Property Markets Challenged by Iran Strikes

Iran’s missile attacks on the United Arab Emirates are setting off a reckoning for the region’s previously booming real estate markets.

New Development properties and companies in Dubai and Abu Dhabi are heavily reliant on foreign investors, and the unrest after the United States and Israel led attacks on Iran late last month could deter the spending that has been critical to the markets, Reuters reported.

Before the conflict broke out, the region’s property market was white-hot, with some concerns arising about possible overheating in the near future as developers were able to pre-sell properties within hours after launch.

Dubai home prices increased 60 percent between 2022 and the first quarter of 2025, according to Fitch data. That growth continued through the rest of last year, with prices up nearly 13 percent year-over-year in the fourth quarter, ⁠according to CBRE. Abu Dhabi residential prices jumped nearly 32 percent over the same three-year period.

Shares in Dubai and Abu Dhabi developers fell sharply. Aldar Properties, Abu Dhabi’s largest listed developer, and Emaar Properties, the firm behind downtown Dubai and the Burj Khalifa, both fell 5 percent. Bond prices of major developers also dropped significantly.

“Investors are not thinking at this stage of investing in the region,” an unnamed senior real estate banker told Reuters, noting that the risk tied to U.A.E. properties has become “much higher.” As a result, this week, his firm put the kibosh on a planned capital raising round for U.A.E. property.

Not all developers are worried about a crash in the market, though. Ziad El Chaar, CEO of Dar Global told the outlet that “nothing is on hold” and “everything is on track.” Dar Global is developing a number of projects branded under President Donald Trump’s family firm, including Trump Plaza hotel in Saudi Arabia.

“In this region, we know things start quickly and end quickly and we overcome this because the fundamentals across the GCC [Gulf Cooperation Council] nations are strong,”

— Chris Malone Méndez