Why the West Asia crisis has pushed Dubai’s real estate into a ‘wait-and-watch’ mode, but the luxury market holds firm
Dubai’s Luxury Property Market Stays Steady Even as Broader Buying Slows
Bharatmorningnews.com – The prime segment of Dubai’s residential market has shown remarkable resilience amid the geopolitical turbulence triggered by the US-Iran war. In the first quarter of 2026, the city logged 2,064 transactions for homes priced above AED 10 million. Although activity tapered through the quarter — from 976 deals in January to 656 in February and 432 in March — the ultra-premium tier continues to draw serious interest, simply at a slower cadence.
Villas remain the dominant product in that top bracket, representing 76% of all transactions above AED 10 million. Off-plan inventory also continues to command a large share of activity: it accounted for 72% of overall transactions in Q1 2026 and 79% of prime-tier deals above the AED 10 million threshold. Cummings identified The Oasis, Dubai Hills Estate, and Jumeirah Golf Estates as among the locations fuelling prime transaction volumes during the quarter.
A Broader “Wait-and-Watch” Posture Among Mainstream Buyers
Below the luxury tier, the picture is more muted. Transaction volumes have cooled from the exceptionally elevated levels recorded at the start of the year, as purchasers across both off-plan and secondary channels adopt a more deliberate stance. Mortgage-backed activity has softened somewhat, with buyers spending additional time weighing value, quality, and location before committing.
Andrew Cummings, Head of Residential Agency at Savills Middle East, told Hindustan Times Real Estate that the current environment reflects normalisation rather than a structural collapse in demand.
“The recent geopolitical developments have contributed to a degree of short-term caution in the market, although we would be careful about attributing softer activity solely to regional tensions. What we are seeing is a broader wait-and-watch approach amongst buyers, with decision-making taking longer and purchasers becoming increasingly selective.”
“We are also seeing buyers become more price-sensitive than they were over the past few years. Demand remains present, but purchasers are taking more time to evaluate opportunities and are adopting a more disciplined approach to decision-making.”
Survey Data: Deferred, Not Diminished
The Savills Residential Investor Sentiment Survey underscores that demand has not vanished — it has been postponed. Roughly 45% of respondents plan to acquire property within the following 12 months, while 32% remain undecided. That split points to delayed intent rather than withdrawn interest.
A pronounced tilt toward completed and secondary-market homes is evident: approximately 60% of surveyed buyers favour ready properties, compared with just 23% who lean toward off-plan projects. The preference signals a heightened emphasis on certainty around delivery schedules, pricing transparency, and immediate occupancy or rental yield.
Investment motives continue to lead the charge, with 52.1% of respondents citing investment as their primary reason for purchasing. Location, connectivity, product quality, and developer track record are increasingly weighted factors in final decisions.
International Buyers Mirror the Same Caution
Although Savills does not publish nationality-specific breakdowns for Indian HNWIs and UHNWIs, Cummings noted that comparable behavioural shifts are observable among international purchasers generally.
“They are taking longer to make purchase decisions, becoming more selective, and prioritising certainty, value and long-term quality.”
Supply Overhang and Pressure on Older Stock
Buyer selectivity, combined with a substantial incoming supply pipeline, is likely to intensify competitive pressure on older secondary-market apartment stock. Approximately 90,000 residential units are slated for delivery over the coming months, expanding buyer choice considerably, Cummings cautioned.
Older secondary apartments may face heightened headwinds where newer developments offer superior amenities, contemporary specifications, and more flexible payment structures.
Demand Persists Where Conditions Align
Nonetheless, successful project launches across both Dubai and Abu Dhabi demonstrate that buyers continue to transact when pricing, product quality, and location converge on their expectations. The market has not shut down; it has recalibrated its tempo.
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