Dubai’s real estate stocks have experienced a significant decline due to escalating tensions in West Asia involving the United States, Israel, and Iran. The DFM Real Estate Index has dropped approximately 20% over the past five trading sessions as investors have become more cautious amidst the growing conflict in the region. This decline has wiped out all the gains made by the sector earlier this year, erasing the progress achieved in 2025.
The index reached a peak of 16,910.3 on February 27, just before tensions in West Asia heightened, marking a stark contrast to the strong rally witnessed in previous years. In 2024, the index surged by 63%, followed by a 38% increase in 2023, showcasing robust investor interest in Dubai’s property market. However, the recent sell-off follows a remarkable year for the emirate’s real estate sector, with property transactions in Dubai hitting nearly AED 917 billion, equivalent to around $250 billion, in 2025.
The real estate market in Dubai has witnessed rapid growth post-pandemic, with property prices soaring by 60 to 75% since 2021, positioning it as one of the top-performing property markets globally in the aftermath of the pandemic. Foreign investors, particularly Indian buyers constituting 20 to 22% of all foreign property purchases, have significantly contributed to this boom. Additionally, prime residential properties in Dubai offer attractive annual rental yields ranging between 6 and 9%, making them among the highest in major global property markets, appealing to both long-term investors and those seeking wealth preservation, notably from India.
