Dubai’s once-booming property market has hit turbulent air as the escalating U.S.-Israel war against Iran sends shockwaves through the Gulf economy, according to Hurriyet Daily News. The Dubai Financial Market Real Estate Index (DFMREI) has plunged about 30% since February 28, when joint U.S. and Israeli strikes on Iran began, killing over 1,200 people, including then-Supreme Leader Ayatollah Ali Khamenei.
The index, which closed at around 16,140 points on February 28, dropped sharply amid rising fears. By mid-March 2026, it hovered near 11,500–11,516 points, its lowest since April 2025, after a steep slide that erased all 2026 gains and part of prior years’ surges. Recent trading showed continued pressure, with a 2.94% drop on March 13 alone.
The conflict, now in its third week, has seen Iran launch repeated missile and drone attacks across the region. Strikes have targeted Israel, U.S. bases, and sites in Gulf countries including the UAE, Saudi Arabia, Bahrain, Kuwait, and Qatar. Iran has threatened key UAE ports like Jebel Ali and Fujairah, warning of further escalation against economic assets. Some drones have reached near Dubai, causing minor damage and injuries, while shipping through the Strait of Hormuz has slowed dramatically, rattling global oil flows.
Investor confidence has crumbled. Major firms have pulled back: Citi evacuated offices in Dubai’s International Financial Centre (DIFC) and elsewhere, while consultancies Deloitte and PwC temporarily closed or cleared staff from DIFC premises and across West Asia as a precaution against threats. Shares in big developers like Emaar Properties fell sharply, and real estate bonds suffered heavy losses.
Experts note Dubai’s long real estate boom fueled by foreign money and post-2023 rallies now faces its first serious test. While some developers insist fundamentals remain strong and the market could prove resilient, analysts warn of slower transactions, potential price corrections, and risks from oversupply in coming years. The war has shattered Dubai’s image as a secure haven, prompting wealthy expatriates and businesses to reconsider their presence.
As missiles continue to fly and oil prices swing, the Gulf watches nervously. Dubai’s skyline, once a symbol of unstoppable growth, now stands under a cloud of uncertainty, its future tied to how and when this regional storm subsides.
