UAE’s property sector faces reckoning after Iran strikes - Business & Economy - Aaj English TV

The United Arab Emirates’ property market has been jolted by Iranian missile strikes that targeted airports, ports and residential areas in Dubai and Abu Dhabi, testing a years-long construction boom that depended heavily on offshore capital. Shares in major listed developers plunged on Wednesday, with Aldar Properties and Emaar Properties each down about 5%, bond prices for leading builders falling sharply and the primary bond market effectively shut as spreads widened across the sector.

“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,” said Ziad El Chaar, CEO of Dar Global, which markets luxury projects including Trump-branded developments across the Gulf. “Nothing is on hold … everything is on track.”

Context and immediate impact

The strikes have punctured the Gulf’s reputation for stability at a moment when market watchers were already warning of oversupply and the limits of demographic absorption. Off-plan transactions — purchases of homes not yet built — accounted for 65% of Dubai deals in 2025, according to Betterhomes, meaning a large portion of activity depends on continued foreign appetite.

• UAE population passed 11 million by 2025, with expatriates comprising nearly 90% of residents, per official data cited in the report.
• Dubai real-estate prices rose roughly 60% between 2022 and Q1 2025, according to Fitch.
• Residential prices were up nearly 13% year-on-year in Q4 2025 in Dubai, while Abu Dhabi saw prices rise almost 32% over the same period, per CBRE.
• JPMorgan warned that Dubai’s population expansion may not absorb the 300,000–400,000 new housing units expected by 2028.

Market participants said the fallout has already begun to influence financing plans. An unnamed senior real-estate banker told Reuters the firm had shelved a planned UAE property capital raising this week because “investors are not thinking at this stage of investing in the region,” adding that the risk premium for UAE property had become “much higher.” International lenders may scale back new loans, raising the prospect of asset sales should the conflict persist.

Industry voices stressed that much will depend on the duration of the regional tensions. “The real effect on real estate should be measured on the level of demand once the conflict halts. That is where the true impact will be felt,” said Mohammed Ali Yasin, chief executive of Ghaf Benefits, a Lunate company in Abu Dhabi. Ryan Lemand, co-founder and CEO of Neovision Wealth Management in Abu Dhabi, warned: “Real estate investment typically relies on stability, visibility and sustained investor confidence, all of which tend to weaken during prolonged geopolitical uncertainty.”

Outlook

Analysts at Abu Dhabi Commercial Bank highlighted foreign buyers as the decisive demand pillar, noting new supply is expected to rise from the second half of 2026 and remain elevated through the following two years. With off-plan deals dominant and bond markets curtailed for new issuance, the sector’s near-term prospects hinge on whether foreign investors return once tensions ease. If they do not, developers face a more difficult funding environment and a potentially prolonged adjustment in prices and activity.