Dubai’s residential real estate market has demonstrated remarkable resilience despite heightened geopolitical tensions in the Middle East, with housing transactions worth AED 225.7 billion recorded during the first half of 2026, according to a new report released by ANAROCK.
The report, titled “Dubai Real Estate: Built on Vision. Proven by Numbers”, analyses how the emirate’s property market performed during and after the regional conflict involving Iran earlier this year. Despite concerns that the conflict could significantly dent investor confidence, the market witnessed only a temporary slowdown before rebounding strongly.
According to ANAROCK, Dubai’s residential prices declined by just 4% to 7% between February and April 2026, even as the Dubai Financial Market (DFM) Real Estate Stock Index plunged by nearly 34% at its lowest point. The report describes this as the widest-ever gap between investor sentiment reflected in stock markets and actual residential asset performance during any major crisis affecting Dubai.
Residential prices also continued their annual upward trajectory. The average selling price across Dubai stood at approximately AED 1,900 per sq. ft. during the first half of 2026, compared to around AED 1,800 per sq. ft. during the same period in 2025, representing a year-on-year increase of nearly 6%.
Aayush Puri, CEO – Residential, Middle East and CEO – ANAROCK Channel Partners (India), said the correction witnessed during the conflict was driven more by temporary buyer sentiment than by any structural weakness in the market.
“The report highlights that while geopolitical tensions briefly affected buyer sentiment during March and April 2026, the correction was largely sentiment-driven—not structural. Residential prices softened by just 4–7% during the February to April period, significantly outperforming the DFM Real Estate stock index, which crashed 34% at its peak,” he said.
Puri added that the market’s recovery has been supported by strong underlying fundamentals, including sustained investor demand, population growth and favourable government policies.
The report notes that residential transaction values in H1 2026 reached AED 225.7 billion. While this represented a 16% decline compared to the exceptionally strong performance recorded in 2025, it still reflected robust activity despite the geopolitical uncertainty. Off-plan properties continued to dominate the market, accounting for nearly 70% to 77% of all residential transactions throughout the period, indicating sustained confidence among buyers.
Buyer enquiries, which briefly slowed during the peak of the conflict, recovered steadily once ceasefire efforts progressed. Weekly residential sales climbed back to nearly AED 10 billion during the recovery phase, reinforcing investor confidence that the slowdown was temporary rather than indicative of any long-term weakness.
The report attributes Dubai’s resilience to its strong demographic and economic fundamentals. During 2025, the city added nearly 470 new residents every day, taking its total population beyond 4.03 million. Residential sales reached an all-time high of AED 547 billion through more than 206,166 property transactions, marking an 18% increase in transaction volumes and a 26% increase in sales value compared to the previous year. Notably, the total transaction value has grown almost tenfold since 2020, when annual residential sales stood at just AED 54 billion.
ANAROCK also highlighted several evolving buyer trends shaping Dubai’s housing market. Investors from more than 150 countries purchased residential properties in Dubai during 2025. Indian buyers remained the largest foreign investor group, accounting for 22% of purchases, followed by buyers from the United Kingdom at 17% and China at 14%.
The market also witnessed more than 129,600 new investors entering during 2025, reflecting a 23% year-on-year increase. Around 80% of all residential transactions were completed through cash purchases, significantly reducing the market’s exposure to interest rate fluctuations.
End-users accounted for 38% of home purchases, while 28% of buyers invested in rental properties for income generation. Another 21% purchased homes primarily to qualify for Golden Visa residency, while the remaining 13% viewed Dubai real estate as a capital preservation strategy.
The report suggests that Dubai’s housing market is entering a more mature phase where location-specific fundamentals will increasingly determine investment performance. Premium destinations such as Palm Jumeirah and Downtown Dubai are expected to continue attracting global wealth, while emerging growth corridors like Dubai South are likely to benefit from major infrastructure development. In contrast, supply-heavy mid-market locations may witness relatively moderate price appreciation.
ANAROCK also compared the impact of previous global crises on Dubai’s residential market. During the Global Financial Crisis between 2008 and 2010, residential prices declined by around 40% and took nearly three-and-a-half years to recover. The oil price collapse of 2015-16 led to only a 2% correction due to Dubai’s limited dependence on oil revenues. During the COVID-19 pandemic in 2020, prices fell approximately 6% before recovering within 13 months. The Russia-Ukraine conflict in 2022 did not negatively impact Dubai’s housing market, with increased Russian capital actually boosting demand in premium locations.
Against this backdrop, the Iran conflict of 2026 resulted in only a 4% to 7% correction, making it the mildest market disruption among the major events analysed in the report. Recovery, according to ANAROCK, was already underway within four months.
Looking ahead, the consultancy projects residential prices to rise by 4% to 7% during 2026 under its base-case scenario, supported by continued population growth, expanding international investor participation and favourable government initiatives. In an accelerated recovery scenario driven by a sustained ceasefire and stronger demand, price appreciation could range between 8% and 13%.
However, the report cautions that any renewed regional conflict during the second half of 2026 remains the primary downside risk to Dubai’s residential property market.
Also Read: Iran Conflict Puts Dubai Real Estate Under Watch: Sentiment Shock or Structural Risk?
