Dubai Real Estate: Will Mid-Segment Properties Face Pressure Amid the US-Israel-Iran War?
March 5, 2026: As the US-Israel-Iran conflict continues, real estate experts say that the Dubai property market could witness a pullback in momentum across volumes, new launches, investor sentiment, and overall buying appetite. Mid-market buyers are expected to negotiate more aggressively in the coming months, while developers may defer new project launches .
Impact on Mid-Segment Properties
In the mid-market segment (properties in the 3 crore to 8 crore range), negotiations are expected to intensify, with end users seeking better deals and investors becoming more conservative about new commitments. This segment is largely supported by professionals and resident buyers, many of whom rely on mortgages .
Ticket sizes above that range are dominated by HNIs investing in ultra-luxury properties that offer lifestyle value alongside returns. The 3–8 crore price segment is virtually absent in prime Dubai locations; such budgets are typically suited to areas like Ras Al Khaimah, Silicon Oasis, Furjan, and Ajman among others .
Amit Goenka, CMD of Nisus Finance, explained: "After price growth of 18% last year and 24% the year before, similar appreciation levels may not be sustained in the near term. New launches could be deferred, and HNIs may reassess the timing of major investments" .
Potential Shift of Capital to India
Morgan Owen, Managing Director for Middle East and North Africa at ANAROCK Group, noted that investment redirection is possible. "Indians and other NRIs make up one of Dubai's biggest groups of buyers, accounting for about 10% of sales in 2025. They are drawn to the high returns and low taxes. If risk perception increases consistently, a small but significant shift of capital from Dubai to India is possible," he said, adding that Dubai's structural appeal is likely to prevent abrupt or impulsive reallocations .
Gaurav Gupta of Zeno Realty offered a nuanced view: "The current uncertainty in Dubai may prompt a small fraction of Indian HNIs to re-evaluate allocations, including to premium Indian markets like Gurugram. But we're talking about a few hundred HNIs at best in the near term. Dubai today is a full ecosystem—infrastructure, tax efficiency, lifestyle, regulatory clarity. One episode is unlikely to reverse that flywheel. Only if this uncertainty were to persist over a prolonged period would capital meaningfully diversify toward hubs like Singapore, London, or even Indian luxury corridors" .
Rental Market Outlook
In the short term, rentals could see some pressure, with leasing activity expected to remain subdued for the next six to eight months. Experts suggest rentals may decline by 5-7% .
As for new project launches, they may be postponed by 2 to 3 quarters if uncertainty persists, leading to a slowdown in new supply. Notably, this year was projected to see a record supply of nearly 1,20,000 units, but prevailing risks could trigger a temporary correction in the Dubai market .
Historical Resilience
Other experts said that while there is no clarity on how long the current situation may persist, Dubai has historically demonstrated resilience, rebounding swiftly from disruptions such as the COVID-19 pandemic and the 2008 Lehman crisis .
Rizwan Sajan, founder and chairman of Danube Group, emphasized: "At this stage, the impact on the real estate market appears to be driven more by sentiment than by any fundamental structural shift. It would be premature to draw any long-term conclusions at this point. While developments like these can create temporary uncertainty, the underlying fundamentals remain resilient. I remain confident in a steady and sustainable path of growth ahead" .
No Large-Scale Capital Exodus Expected
Experts concurred that a large-scale shift of capital to other countries is unlikely, as few cities offer the same combination of affordable luxury, lifestyle appeal, and global connectivity as Dubai. As for whether investors would liquidate assets in Dubai and redeploy capital into India, that appears unlikely, with currency depreciation and potential tax implications for NRIs encouraging many to retain or reinvest their funds overseas .
Some experts believe NRI investments into Indian real estate, particularly in the luxury segment, could also see a temporary slowdown amid the current geopolitical tensions, with Gulf-based NRIs possibly pausing luxury home investments until the situation stabilizes .