Buyers gain leverage in Dubai housing market amid regional tensions

Dubai’s residential property market has entered its most buyer-friendly phase in several years in light of the mounting regional uncertainties.

Analysts say villa prices have begun to stabilize, transaction volumes have slowed and sellers are increasingly willing to negotiate, amid regional uncertainty linked to ongoing hostilities in the Middle East, as Emirati media outlet The National reports.

According to property agency CBRE’s UAE Real Estate Market Review and data from property platform YallaValue, annual price growth in Dubai’s residential sector eased to around 9 percent in the first quarter, down from the sharp double-digit increases seen during the post-pandemic property boom. Transaction volumes also dropped by roughly 20 percent in March.

Despite the slowdown, average residential prices have largely held steady. The UAE banking sector remains well-capitalized, while S&P Global Ratings recently reaffirmed the country’s AA/A-1+ sovereign credit rating.

Market observers say the shift could create opportunities for long-term buyers willing to wait for the right deal.

“We're now seeing villas transact at fair market value and in some cases slightly below,” Matthew Bate, chief executive of BlackBrick Property, told The National.

“The market is still active but the profile of the buyer has shifted. Today, it's largely domestic buyers with both financial and emotional equity in Dubai.”

Bate said the current environment marks a clear contrast with the urgency that dominated the market throughout much of 2023 and 2024.

“We are now in a calmer window where buyers can negotiate properly and secure quality assets before conditions recover. If you're planning to hold for five years or more, this is where the opportunity sits,” he told the newspaper.

Rent vs Buy

Although rental yields have softened somewhat, Dubai’s property market still remains attractive by international standards.

Daniel McCulloch, head of valuations at CBRE Mena, noted that buy-to-let investors continue to benefit from relatively strong rental returns as well as the absence of income and capital gains taxes.

This combination, he said, helps keep Dubai real estate competitive globally.

“For buyers with a long-term perspective, focusing on 'time in the market' rather than 'timing the market' is generally recommended,” McCulloch said, adding that the current market environment — including the potential emergence of distressed sellers — may favour patient buyers.

The broader regional market has also shown resilience. CBRE’s first-quarter UAE Real Estate Market Review found that while residential price growth in Dubai slowed to around 9 percent year-on-year, prices did not decline overall. Meanwhile, Abu Dhabi recorded all-time high residential transaction values during the same period.

By Nazrin Sadigova