Two weeks after regional conflict began on February 28, Dubai’s real estate sector is demonstrating a striking divergence between physical market performance and listed equity valuations.
According to Dubai Land Department (DLD) data analyzed by The Real Estate Reports, total transaction value surged to Dh15.66 billion in the week of March 9–15, representing a 51% increase in value and a 58% jump in transaction counts compared to the previous week.
However, when excluding land plots to remove volatility from high-value land deals, built property value grew a more modest 13% to Dh8.26 billion, while transaction volume rose 56% to 4,327 deals. The gap between volume growth and value growth suggests buyers are proceeding with caution, resulting in a lower average ticket size per transaction.
Off-Plan Sales Drive Market Activity
Off-plan properties continued to dominate, accounting for 63% of built property value in the second week of March, only slightly below the 66% recorded immediately after conflict began. Within this segment, villa sales increased their share to approximately 23% of off-plan value, up from 16% the previous week, indicating buyer preference for tangible residential assets over commercial properties.
The recovery in mortgage registrations provided further evidence of market functionality, with 1,053 mortgages registered during the week, nearly double the prior period, suggesting that the financing infrastructure supporting Dubai’s property sector remains intact despite regional tensions.
“While the physical market shows signs of a recovery in activity, the heavy-volume sell-off on the DFM suggests that financial markets may be pricing in a more prolonged period of uncertainty.”
Equity Markets Tell Different Story
In stark contrast to the physical market’s resilience, the Dubai Financial Market (DFM) continued its downward trajectory. The DFM General Index (DFMGI) fell 5.7% in the second week of March on turnover of 1.52 billion shares—nearly double the volume of the previous week.
Real estate stocks bore the brunt of the sell-off, with the DFM Real Estate Index (DFMREI) plunging 13.8% last week as investors demanded higher risk premiums for regional exposure. Trading resumed on March 4 with a temporary 5% limit-down threshold implemented to prevent panic selling.
The divergence highlights how sentiment-driven equity markets are repricing regional risk while the underlying property economy continues to function. For investors, the data suggests that while short-term caution prevails in financial markets, Dubai’s real estate infrastructure and transactional mechanisms remain operational.
Ali Shahin, founder of The Real Estate Reports, noted that Dubai real estate is proving it can operate under pressure even as listed property companies absorb the immediate shock of geopolitical uncertainty.
The physical market’s resilience comes despite an initial 50% drop in weekly transactions immediately following the start of regional conflict, with industry leaders citing structural advantages and a diversified buyer base as key factors supporting continued capital inflows.
For now, Dubai’s property sector appears capable of maintaining operational momentum despite elevated geopolitical risk, though the heavy selling in listed real estate stocks suggests investors remain cautious about medium-term prospects in the region.