Most commentary on Dubai property since February has been written from the headlines. The headline number has been the listed property index, which fell about 30 percent in the first fortnight of the conflict. It is a real number. It is also a measure of what traders feared, not of what happened to homes.
There is now enough evidence to look past it. Two full quarters of registered sales, mortgages and professional valuations have been recorded since the conflict began: Q2 2026, April to June, and Q3 2026, July to September. A month of data gives a first impression. Two quarters give a pattern.
This article sets out that pattern: what the data shows, what has changed for the market, what has not, and how we are advising clients through it. Data, context, and no spin. The key figures are below; every one is sourced at the foot of the page.
| Measure | Figure | Period | Source |
|---|---|---|---|
| Residential values, change since February | −10.2% | Feb to Aug 2026 | ValuStrat |
| Residential values, year-on-year | −3.1% | Aug 2026 | ValuStrat |
| Apartment values, year-on-year | −5.3% | Aug 2026 | ValuStrat |
| Villa values, year-on-year | −1.7% | Aug 2026 | ValuStrat |
| Residential values, change in the month | −0.2% | Jul and Aug 2026 | ValuStrat |
| Property sales, Q2 | AED 110.1bn, 37,506 sales | Apr to Jun 2026 | DLD, monthly reports |
| Property sales, Q3 | AED 92.4bn, 36,961 sales | Jul to Sep 2026 | DLD, monthly reports |
| Property sales, first nine months | AED 379.4bn, 123,416 sales | Jan to Sep 2026 | DLD via Emirates 24|7 |
| Mortgage registrations | AED 151.13bn, 34,910 | Jan to Sep 2026 | DLD via Emirates 24|7 |
| DFM Real Estate Index, initial fall | about −30% | First fortnight of the conflict | Dubai Financial Market |
| Dirham peg to the US dollar | 3.6725 | Unchanged since 1997 | UAE Central Bank |
| Dubai population | 4.74 million | Jul 2026 | Cavendish Maxwell |
| Emaar masterplan announced | AED 200bn, ~150,000 residents | 11 Jun 2026 | Emaar Properties |
IThe conflict, in brief
The conflict began on 28 February, when the United States and Israel struck Iran. A ceasefire mediated by Pakistan followed on 8 April, and held under strain through the spring. On 17 June the US and Iranian presidents signed a memorandum intended to end the fighting, announced the next day in Islamabad.
It lasted three weeks. The two sides read its Hormuz clause differently. Washington read it as a guarantee of safe passage. Tehran read it as recognition of its right to control, and charge for, traffic through the strait. On 8 July the ceasefire collapsed, and Iran closed the Strait of Hormuz to most traffic.
Since July the confrontation has been chiefly between Washington and Tehran, at sea and around the strait. Indirect talks in New York in late September, with Qatar passing messages, produced no breakthrough. As of 4 October, Tehran says the strait stays closed until seven conditions drawn from the June memorandum are met.
| Date | Event |
|---|---|
| 28 Feb 2026 | The United States and Israel strike Iran; the conflict begins |
| 8 Apr 2026 | A ceasefire mediated by Pakistan takes effect |
| 17 Jun 2026 | US and Iranian presidents sign a memorandum to end the fighting |
| 8 Jul 2026 | The ceasefire collapses; Iran closes the Strait of Hormuz to most traffic |
| Late Sep 2026 | Indirect talks in New York, with Qatar passing messages, end without a breakthrough |
| 4 Oct 2026 | Tehran says the strait stays closed until seven conditions are met |
The UAE sits beside this conflict rather than at its centre. Its exposure runs through shipping, trade, aviation and sentiment, and that is the lens for everything that follows. The honest summary is that there is no end date. Any investment case for Dubai now has to hold with that as the base case, not as a tail risk.
IITwo quarters of data
Values fell, then levelled. The ValuStrat Price Index, a valuation-based measure of Dubai residential capital values compiled by RICS-registered valuers, fell 5.9 percent in March, 1.9 percent in April, 1.2 percent in May and 1.0 percent in June. By July and August the monthly move was down to 0.2 percent. Values are now 10.2 percent below February and 3.1 percent below a year ago. That is a real correction, and it should be described as one.
Most of it happened early. About nine of the ten points came between March and May. When the ceasefire collapsed in July, the index moved 0.2 percent. A market that has already priced a long conflict does not reprice it again each time the headlines turn.
The second shock moved Dubai values a fraction as much as the first.
Buyers kept buying. Dubai recorded AED 110.1 billion of property sales across 37,506 transactions in Q2 2026, and AED 92.4 billion across 36,961 in Q3. The number of deals fell by less than 2 percent between the quarters; the value fell by 16 percent. The average value per sale came down from about AED 2.9 million to about AED 2.5 million, consistent with prices easing and more ready stock in the mix.
| Month | Sales (AED bn) | Transactions | Reported by |
|---|---|---|---|
| April 2026 | 48.00 | 13,977 | Arabian Business |
| May 2026 | 29.46 | 9,770 | Arabian Business |
| June 2026 | 32.64 | 13,759 | Al Masdar Al Aqaari |
| Q2 2026 | 110.1 | 37,506 | Sum of months |
| July 2026 | 34.88 | 13,930 | Al Masdar Al Aqaari |
| August 2026 | 27.89 | 11,601 | Arabian Business |
| September 2026 | 29.66 | 11,430 | Emirates 24|7 |
| Q3 2026 | 92.4 | 36,961 | Sum of months |
Year-on-year the picture is softer, and it should be read as such. ValuStrat counts August off-plan registrations down 40.4 percent on August 2025, and ready sales down 20.6 percent. 2025 was a record year, but these are real declines. Across the first nine months Dubai still recorded AED 379.4 billion of sales across 123,416 transactions, second only to the same period of 2025. Our reading of the first half sets that record in context.
The fall is not uniform. Apartments are down 5.3 percent year-on-year. Villas are down 1.7 percent, their first annual decline in five years. Yet 61 percent of freehold apartment communities and 73 percent of villa communities held their values in August. This is a market sorting itself by asset and by location, not one falling as a block.
Lending did not stop. Mortgage registrations reached AED 151.13 billion across 34,910 transactions in the first nine months, AED 16.79 billion of it in September alone. Banks were still underwriting Dubai property through the months the strait was closed.
People kept arriving. Dubai's population rose by more than 161,000 in 2026 to reach 4.74 million by July. Emirates carried 8.7 million passengers across July and August with network capacity back to 98 percent, and Dubai's airports are at 84 percent of pre-crisis capacity. Population growth while a conflict runs next door, not only before it, is the clearest structural signal in this data.
IIIThe index and the deal
Two numbers have framed this period. The DFM Real Estate Index, which tracks listed developers, REITs and property companies on the Dubai Financial Market, fell about 30 percent from its February peak within a fortnight. Dubai residential values, measured by professional valuations against registered sales, fell 10.2 percent over six months.
The gap between them is the useful part. Listed property shares are instruments of sentiment, leverage and institutional positioning; they move on fear, and they moved first and furthest. Registered sales and professional valuations measure what owners and buyers actually accept. They moved a third as far, took six months to do it, and then stopped.
In a long conflict, the second number is the one an investor lives with.
IVWhat has changed for the market
Some effects of the conflict are now structural for the near term, and they matter for how capital is deployed.
Hormuz is a standing cost, not a passing one. With the strait largely closed since July, combined oil flows through Hormuz, Bab al-Mandeb and Suez ran 61 percent below February levels in September. Freight, steel and finishing costs stay elevated. For off-plan buyers this lands on delivery, because schemes handing over in 2029 and 2030 are being built through it. The clearest public example is Wynn Al Marjan Island in Ras Al Khaimah. Its opening has moved to September 2027 and its cost has risen by about $600 million, around half of which Wynn attributes to the conflict.
Trade is being rerouted. Shipping through the strait remains limited, and trade with Iran, historically one of Dubai's larger re-export markets, has been suspended since 19 August. Both weigh on re-export volumes through Jebel Ali. The response has been to build around the chokepoint. The Sharjah–Oman land corridor moved $463 million of goods in its first three months, and a new Etihad Rail freight line now carries containers from Fujairah, outside the strait, to Abu Dhabi's industrial city.
Rents are softening. CBRE data shows real rents down 4 percent in Q2, with new completions continuing to arrive. For an investor buying for yield, the rent line now matters as much as the price line.
VWhat has not changed
The currency. The dirham held its peg at 3.6725 to the dollar through every phase of the conflict, as it has since 1997. Behind it sit roughly $232 billion in central-bank reserves, the Abu Dhabi Investment Authority's approximately $1.18 trillion, and Mubadala's roughly $358 billion: sovereign capital that does not depend on any single shipping lane.
The backstop. The precedent for how this system behaves under stress is on the record. In December 2009, when Dubai World sought to restructure around $26 billion of debt, Abu Dhabi provided $10 billion, on the day a Nakheel sukuk fell due. The capacity to act that way is far larger today.
The people and the capital. DIFC family entities grew 61 percent in 2025 to 1,289 active structures, a figure published before the conflict began. The population growth set out above is the stronger signal, because it happened during the conflict, not before it.
The plan, and the developers building it. The D33 economic agenda and the 2040 Urban Master Plan continue, and Dubai's two largest developers are still committing capital to them. On 11 June, in the middle of the conflict, Emaar announced the largest masterplan in its history: AED 200 billion, more than 4.5 million square metres of floor space, and homes for nearly 150,000 residents in the heart of Dubai. Its first-half group sales reached AED 26.6 billion, and its revenue backlog rose 13 percent on a year earlier to AED 164.9 billion. In September, Meraas, part of Dubai Holding, awarded an AED 1 billion contract to build 272 homes at Nad Al Sheba Gardens, due for completion in 2028. Developers do not commit on that scale when they expect demand to disappear.
VIWhat to expect next
This section is a forecast, and we mark it as one. The facts above are established. What follows is judgement.
Plan for a long conflict, not an all-clear. The June memorandum showed how quickly a settlement can unwind. The investment case has to hold with the strait closed, because for now it largely is.
A Hormuz reopening would be the largest single de-risking event, and we would not front-run it. Tehran's stated position is that it will both fight and negotiate. A deal could come quickly. So could another round of fighting. Neither is a basis for timing a purchase.
Consolidation continues; a second leg down is not our base case. The index has barely moved since July, through the ceasefire's collapse and the strait's closure. Emaar's founder, Mohamed Alabbar, has said an adjustment of 5 to 10 percent is possible. We think that is the right planning range: single digits, not a collapse.
Ready stock keeps gaining ground. Ready homes took 54 percent of sales value in July on 31 percent of transactions. In uncertain conditions, buyers prefer what already exists.
Off-plan needs developer-by-developer scrutiny, more than before. On schemes handing over in 2029 and 2030, the developer's balance sheet and delivery record now matter more than the entry price or the payment plan.
What we are watching: Hormuz transit counts rather than headlines; the oil price, near $100 a barrel in late September; the return of most European airlines to Dubai, scheduled for 25 October; the Q4 Dubai Land Department figures; the monthly ValuStrat index; rents against prices; developer updates on delivery; and the DFM Real Estate Index as the early read on sentiment. Those are the signals that separate a market that has absorbed a long shock from one still waiting for the next.
VIIHow we are advising
Our advice in a conflict is the same as outside one, and that consistency is the point. Fear is not a basis for a decision. Neither is relief at the next headline.
Know what you own, know why you own it, and know what would actually change your thesis. For a buyer today, that means pricing a long conflict into the plan, choosing developers on balance sheet and delivery record, and being patient on entry price. Nothing in the data requires haste.
We are based in Dubai because we believe in the structural case for this city. Seven months of conflict on its doorstep have tested that case harder than any model could. It bent: values are down about a tenth. It did not break: people, lending and buyers kept coming. That deserves to be stated plainly, not as triumphalism, but as evidence.
This analysis is also available as a briefing in our house format. Download the Two Quarters briefing as a PDF.