Dubai property sector shows early signs of weakness

Dubai’s property market is beginning to show early signs of weakening, nearly three weeks into the US-Israeli war on Iran, with data from analysts showing tanking transaction volumes and some real estate agents pointing to price reductions.

The war, and Tehran’s strikes against Israel, US bases and Gulf states, including the United Arab Emirates, have pierced Dubai’s image as a safe haven for the world’s wealthy.

Real estate transaction volumes in the UAE fell 37% year-on-year in the first 12 days of March, and 49% month-on-month, Goldman Sachs analysts estimated in a note published this week.

Some properties are already being offered at big discounts, with price cuts of 12-15%, according to some real estate agents and messages on social media that Reuters reviewed.

For instance, a seller was looking for a “quick sale” for a property close to the Burj Khalifa — the world’s tallest building — a message shared by an agent read. The seller was looking for $650,000, down about 12% from a previous price of $735,000, “due to the current situation.” The agent spoke on condition of anonymity because of the sensitivity of the matter.

An off-plan flat in Dubai’s coveted Palm Jumeirah was also being offered at a 15% discount to its original price of around $2 million, according to a message reviewed by Reuters on a WhatsApp group created a week into the war.