Dubai home sale transactions fall in third quarter due to regional uncertainty

Residential property sales in Dubai experienced a significant decline in the third quarter of the year, attributed to regional uncertainty stemming from the Iran war, according to a report by property consultants Cavendish Maxwell. The total value of home sales amounted to Dh72.6 billion ($19.7 billion), a 47% decrease compared to the same period last year.

The number of transactions fell by 38%, reaching 34,000, due to reduced activity as the delay in property sales registrations subsides. Director and head of residential valuation at Cavendish Maxwell, Ronan Arthur, noted that purchasing activity became more cautious in the weeks and months following the conflict's onset. Off-plan sales continued to dominate, accounting for 65% of total sales values and 72% of property purchases during the quarter.

The market, which has grown in recent years due to government initiatives, started to cool during regional tensions triggered by the Iran war that began in late February. This conflict also affected hospitality, tourism, and aviation sectors, with Tehran retaliating against energy sites and civilian infrastructure across the Gulf region and Iraq.

While Dubai's real estate demand remains driven by fundamentals, near-term activity will be influenced by factors such as the frequency of new launches, regional uncertainty, and broader buyer activity normalization. S&P Global Ratings also reported a significant drop in Dubai's residential property transactions due to the war, with total real estate sales averaging 12,644 per month between March and September 2026, a 26% decrease from January and February 2026.

Prices declined by 5% to 15% between the end of 2025 and September 2026, according to industry reports. The ratings agency anticipates a gradual price correction in Dubai's property market, with secondary-market transactions becoming more prevalent as price declines prompt investors to offload their properties.