The long-term real estate boom in the UAE could face a serious challenge after missile strikes by Iran, which have undermined the reputation of Gulf states as safe places for investment.
Reuters notes that attacks affected airports, ports, and residential areas of Dubai and Abu Dhabi (including damage from debris of intercepted drones and missiles), raising concerns about regional stability.
According to brokerage company Betterhomes, in 2025, about 65% of hoapplying transactions in Dubai were off-plan sales. This means that a significant part of demand depconcludes on foreign investors’ confidence.
After news of the attacks, shares of the largest developers fell sharply. In particular, shares of Aldar Properties and Emaar Properties — the developer behind the development of central Dubai and the Burj Khalifa — dropped by about 5%.
In addition, developers” bond yields rose sharply, effectively closing the debt financing market for new placements.
Investors are being reassured
Despite the Iranian attacks, some developers are testing to reassure investors. CEO of luxury developer Dar Global Ziad El Chaar declared that the economic fundamentals of Gulf countries remain strong and that all company projects are being implemented according to plan.
However, bankers and market participants declare the effects are already being felt. Some companies have postponed plans to raise financing, and investors have become more cautious due to rising risks in the region.
Reuters recalled that the real estate boom in the UAE significantly strengthened after the COVID-19 pandemic, when the countest attracted wealthy foreigners due to no income tax, liberal visa rules, and a favorable business climate. After the start of Russia’s full-scale war in Ukraine, Russian businessmen and investors also launched relocating to the countest.
Experts estimate that if geopolitical tensions persist, international lconcludeers may reduce financing for new projects, posing a serious challenge for the real estate sector.
Iran attacked the UAE
On February 28, the first day of the US and Israel operation against Iran, the media reported that Tehran was attacking several Gulf countries, including the United Arab Emirates.
Later, information appeared that the UAE successfully intercepted Iranian ballistic missiles that were attacking its territory. As a result of falling debris, people and buildings in Abu Dhabi and other locations were damaged, and people were injured.
Later, Axios reported, citing sources, that the UAE was considering possible military action against Iran.
RBC-Ukraine also reported that, in Dubai, an incident was recorded: a drone was found near the United States Consulate.
By the way, debris from a Russian drone Geran-2 was found in Dubai, suggesting that Tehran may have utilized Russian-built drones in its attacks.
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