They say that if the conflict continues, the market may see a broader moderation in transaction volumes, new launches, investor sentiment and overall buying appetite. Mid-market buyers are expected to negotiate more aggressively in the coming months, while developers may defer new project launches. HNIs could reassess the timing of large-ticket investments and become more cautious about new commitments. Prolonged uncertainty may even prompt a modest shift of capital from Dubai to India, at least in the near term.

“If the US-Israel-Iran war drags on, the Dubai real estate market could witness a pullback in momentum across volumes, new launches, investor sentiment and overall appetite. Buyers may adopt a wait-and-watch approach or negotiate harder for better bargains in the next few months, but everything depends on the duration, how long the conflict lasts,” explains Amit Goenka, CMD, Nisus Finance. In February, the company announced the expansion of its UAE property portfolio with a ₹247 crore investment in residential apartments in Majan, Dubai.

Also read: Dubai real estate update: ‘Over 60% of on-hold deals likely to close next quarter if uncertainty eases in 4-8 weeks’

“After price growth of 18% last year and 24% the year before, similar appreciation levels may not be sustained in the near term. New launches could be deferred, and HNIs may reassess the timing of major investments,” he said.

In the mid-market segment (properties in the ₹3 crore to ₹8 crore range), negotiations are expected to intensify, with end users seeking better deals and investors becoming more conservative about new commitments. High-value transactions are therefore likely to remain muted for some time, as HNIs may defer large-ticket purchases, he said.

Amid broader sell-offs in financial markets, there could be a temporary flight to safety, with commodities such as gold and silver gaining traction. At the same time, equities and property remain under pressure, he said.

Other experts said that while there is no clarity on how long the current situation may persist, Dubai has historically demonstrated resilience, rebounding swiftly from disruptions such as the COVID-19 pandemic and the 2008 Lehman crisis.

Also Read: Dubai real estate: X post suggests Mumbai, Bengaluru, GIFT City as alternatives, sparks debate

At this stage, the impact on “the real estate market appears to be driven more by sentiment than by any fundamental structural shift. It would be premature to draw any long-term conclusions at this point. While developments like these can create temporary uncertainty, the underlying fundamentals remain resilient. I remain confident in a steady and sustainable path of growth ahead,” said Rizwan Sajan, founder and chairman, Danube Group.

The buyer mix is also important to understand. The ₹3–8 crore mid- segment is largely supported by professionals and resident buyers, many of whom rely on mortgages. Ticket sizes above that are dominated by HNIs investing in ultra-luxury properties that offer lifestyle value alongside returns. The ₹3–8 crore price segment is virtually absent in prime Dubai locations; such budgets are typically suited to areas like Ras Al Khaimah, Silicon Oasis, Furjan and Ajman among others, explained a real estate expert who asked not to be named.

Investor interest for ultra-high-end properties broadly comes from two segments: ultra-high-net-worth individuals, including Indian business owners and Bollywood stars who invest in prime Dubai properties. A report by Knight Frank said demand for villas outpaced apartments among HNWIs in 2025, with branded residences also emerging as a preferred choice.

What happens next will depend largely on the duration of the crisis. A prolonged situation could lead to a sentiment-driven pause, slower transaction volumes, price corrections and stronger buyer-side negotiations before stability returns, they said.

“The current situation in the Middle East is clearly making real estate investors more cautious, especially in markets like Dubai that have long been seen as safe and stable for investment,” said Pyush Lohia, Managing Director, Lohia Worldspace.

“While we are not seeing panic selling at this stage, there is a clear ‘wait-and-watch’ approach among buyers. In the short term, this could slightly slow down sales activity as investors take time to reassess risks and timelines before making new decisions, particularly with a large number of new units expected to enter the market this year.”

The Dubai market offered attractive rental yields of 6–8%. “In the short term, rentals could see some pressure, with leasing activity expected to remain subdued for the next six to eight months. Rentals may decline by 5-7%,” said an expert.

As for new project launches, they may be postponed by 2 to 3 quarters if uncertainty persists, leading to a slowdown in new supply. Notably, this year was projected to see a record supply of nearly 1,20,000 units, but prevailing risks could trigger a temporary correction in the Dubai market, said experts.

“If risk perception increases consistently, a small but significant shift of capital from Dubai to India is possible,” he said, adding that Dubai’s structural appeal is likely to prevent abrupt or impulsive reallocations.

Gaurav Gupta of Zeno Realty is of the view that the current uncertainty in Dubai may prompt a small fraction of Indian HNIs to re-evaluate allocations, including to premium Indian markets like Gurugram.

“But we’re talking about a few hundred HNIs at best in the near term and at this stage, I don’t see it triggering a meaningful capital exodus. Dubai today is a full ecosystem infrastructure, tax efficiency, lifestyle, regulatory clarity. One episode is unlikely to reverse that flywheel. Only If this uncertainty were to persist over a prolonged period, then yes, capital could meaningfully diversify toward hubs like Singapore, London, or even Indian luxury corridors. But as long as its a one-off incident, then its only a near short term issue than beginning of a structural shift in capital flows,” he said.

Experts concurred that it is unlikely to be a large-scale shift of capital to other countries, as few cities offer the same combination of affordable luxury, lifestyle appeal and global connectivity as Dubai.

As for whether investors would liquidate assets in Dubai and redeploy capital into India, that appears unlikely. Real estate experts said that currency depreciation and potential tax implications for NRIs may encourage many to retain or reinvest their funds overseas.

Some experts believe NRI investments into Indian real estate, particularly in the luxury segment, could also see a temporary slowdown amid the current geopolitical tensions. Gulf-based NRIs may pause luxury home investments until the situation stabilises, rather than commit to high-value property purchases in India, they said.