UAE property market faces uncertainty after Iranian missile strikes

The United Arab Emirates’ (UAE) property sector is facing new uncertainty after Iranian missile strikes hit airports, ports and residential areas in Dubai and Abu Dhabi, raising concerns among investors and testing the region’s reputation as a safe haven for global capital, Reuters reported.

Shares of major developers fell on Wednesday following the attacks. Aldar Properties and Emaar Properties both dropped about 5%, while bond prices of several large developers also declined. Bond markets, a key funding source for the sector, have largely closed to new issuance amid rising borrowing costs.

The UAE property market has experienced a strong rally in recent years, supported by foreign investment and an influx of wealthy migrants attracted by tax advantages and economic reforms. Dubai property prices rose about 60% between 2022 and early 2025, while residential prices in Abu Dhabi increased nearly 32% over the same period.

Off-plan sales accounted for about 65% of Dubai property transactions in 2025, meaning many purchases were made for homes still under construction. Economists say demand from foreign buyers will be crucial for absorbing this supply, especially as geopolitical tensions may affect investor confidence.

Following Iran’s attacks, airports across the UAE suspended operations, leaving more than 20,000 passengers stranded. To assist affected travelers, the government instructed hotels to extend stays for guests unable to leave the country, promising to cover accommodation and meal costs.