The image of Dubai, the economic hub of the United Arab Emirates (UAE), has been damaged as a ‘safe haven, as the conflict has spread across the Middle East following the US-Israeli attack on Iran. This has affected Dubai’s property market, where transactions are rapidly declining.
The situation has rached such a level that some housing agents have already indicated a reduction in property prices. Besides, share prices of housing sector companies have also fallen significantly. Shares of Emer Properties have fallen more than 26 percent in the Dubai stock market since the start of the war.
In the first 12 days of March, UAE housing transactions fell 37 percent compared to the same period last year, according to an analysis by Goldman Sachs this week. This decline is about 49 percent compared to the same period in February.
Besides, some properties are said to be being sold at large discounts. According to data from real estate agents and media analysis, property prices have been reduced by 12 to 15 percent in some places.
The UAE’s real estate sector has long prospered in line with Dubai’s economic boom. However, after five consecutive years of price increase, there was already a fear of recession in the market. The current conflict is now seen as the biggest challenge for the sector.
The influx of wealthy immigrants had held up demand for so long because of the tax-free policy. But according to City Bank analysts, the war poses a major risk to Dubai’s future population growth prospects. This may increase reluctance among home buyers and investors, which will put more pressure on the market.