News: Dubai Mid-Segment Homes May Strain If War Drags On-04-03-2026
Dubai’s mid-segment housing is likely to bear the brunt if the US-Israel-Iran war continues, real estate experts say. Buyers who have already booked may push to renegotiate or seek bigger discounts, prospective purchasers are expected to wait for stability, and developers may hold back launches. Some capital could also move towards premium residential projects in India, at least in the near term.
Amit Goenka, CMD, Nisus Finance, said a prolonged conflict could slow momentum in volumes, launches, sentiment and overall appetite, though everything depends on how long it lasts. His company announced in February that it was expanding its UAE portfolio with a Rs 247 crore investment in residential apartments in Majan, Dubai. After price growth of 18% last year and 24% the year before, he said, similar appreciation may not be sustained in the near term. In the mid-market, which he defined as properties of Rs 3 crore to Rs 8 crore, he expects harder bargaining by end users and more conservative investors. High-value deals are likely to stay muted as HNIs defer large purchases. With financial markets selling off, he said there could be a temporary flight to gold and silver while equities and property remain under pressure.
Other experts noted that Dubai recovered quickly from the COVID-19 pandemic and the 2008 Lehman crisis. Rizwan Sajan, founder and chairman, Danube Group, said the impact so far appears driven by sentiment and not by any structural shift, and that it would be premature to draw long-term conclusions. He said he remains confident of steady and sustainable growth.
Dubai’s attraction rests on a tax-friendly regime, residency-linked investment and rental yields of almost 6-8%. Experts say prices have risen 20-40% over the past two years. Prashant Thakur, Executive Director and Head - Research & Advisory, ANAROCK Group, said Indian nationals account for roughly 20-22% of foreign property purchases in Dubai, the largest investor group, drawn by proximity, the dirham’s peg to the US dollar and rental yields that typically range between 6% and 9%. Several Indian real estate firms are also developing or planning projects in the region.
An expert who asked not to be named said the Rs 3-8 crore segment is supported largely by professionals and resident buyers, many of them reliant on mortgages, while higher ticket sizes are dominated by HNIs buying ultra-luxury property. That budget is virtually absent in prime Dubai and is typically suited to areas such as Ras Al Khaimah, Silicon Oasis, Furjan and Ajman. Demand at the top end comes from ultra-high-net-worth individuals, including Indian business owners and Bollywood stars. A Knight Frank report said villas outpaced apartments among HNWIs in 2025, with branded residences also emerging as a preferred choice.
Pyush Lohia, Managing Director, Lohia Worldspace, said investors have clearly become more cautious. There is no panic selling, he said, but a wait-and-watch approach could slightly slow sales in the short term, particularly with a large number of new units due this year.
One expert said leasing activity is expected to remain subdued for the next six to eight months and rentals may decline by 5-7%. Experts said launches may be postponed by 2 to 3 quarters if uncertainty persists. This year had been projected to see a record supply of nearly 1,20,000 units, and prevailing risks could trigger a temporary correction. A prolonged crisis, they said, could bring a sentiment-driven pause, slower volumes, price corrections and stronger buyer-side negotiation before stability returns.
On whether money will move to India, Morgan Owen, managing director, Middle East and North Africa at ANAROCK Group, said Indians and other NRIs make up one of Dubai’s biggest buyer groups, accounting for about 10% of sales in 2025. A "small but significant" shift of capital to India is possible if risk perception rises consistently, he said, though Dubai’s structural appeal should prevent abrupt reallocations.
Gaurav Gupta of Zeno Realty said the uncertainty may prompt a small fraction of Indian HNIs to re-evaluate allocations, including to premium Indian markets like Gurugram, but this would involve a few hundred HNIs at best in the near term and he does not expect a meaningful exodus. Only if uncertainty persists for a prolonged period, he said, could capital diversify meaningfully towards Singapore, London or Indian luxury corridors.
Experts agreed a large-scale shift is unlikely because few cities match Dubai’s mix of affordable luxury, lifestyle and global connectivity. Investors are also unlikely to liquidate Dubai assets to redeploy in India, since currency depreciation and potential tax implications may encourage NRIs to keep or reinvest funds overseas. Some experts believe Gulf-based NRIs may pause luxury home purchases in India until the situation stabilises.
