Dubai Real Estate Prices: An analysis shows that sales in the secondary market -- older, ready homes -- have fallen nearly 30 per cent in one month.

Dubai Property Prices: After four consecutive years of appreciation, property prices in Dubai are finally showing signs of cooling. As a consequence of the ongoing Iran war, prices of both commercial and residential properties have gone down in Dubai -- a first since the Covid-19 pandemic.

A recent report from property consultancy ValuStrat shows that Dubai's Residential Price Index dropped 5.9 per cent in March. According to industry experts, this is the result of international buyers becoming cautious after Iran struck multiple sites in UAE. The kingdom's air defences couldn't prove effective against the Iranian air strikes.

With no agreement in sight yet, the geopolitical situation remains unpredictable -- preventing investors to shy away from purchasing or leasing properties in Dubai. Even local developers are now adopting a wait-and-watch approach. This hesitation is slowing the market's momentum.

Another analysis by Anadolu Agency shows that sales in the secondary market -- older, ready homes -- have also fallen nearly 30 per cent in the past month. Luxury neighbourhoods have been hit the most as enquiries from overseas buyers have dropped noticeably.

Dubai Real Estate: From Sellers' Market To Buyers' Market

For potential homebuyers, this price correction may open a window of opportunity. After years of soaring prices and intense competition, Dubai's skyline homes are becoming relatively more affordable. "In the context of a broader and meaningful correlation, a slump in property prices in Dubai by a span of 5 to 6 per cent is a welcomed adjustment," said Anurag Goel, Director, Goel Ganga Developments.

However, Dubai's residential supply is expected to rise by 90,000 to 100,000 units between 2023 and 2026. "If one considers the expected temporary global uncertainty and a demand slump, the real estate market is naturally repositioning from a seller's market to a more even or a slightly buyer's market," said Hardik Shah, Director, Shyam Group-Dholera SIR.

As per an estimate, there has been a broad-market correction of about 5 to 7 per cent in Dubai. "Prices of residences in the new hot Dubai market have been surprisingly as high as (Arab Emirates Dirham) AED 1,500 to AED 1,800 per square feet. The new equilibrium is in the range of AED 1,400 to AED 1,650 per square feet. This new price range has the effect of re-stimulating the positive demand in the market," said Shiv Garg, Director, Forteasia Realty.