Dubai property sector shows early signs of weakness

Dubai’s property market is beginning to show early signs of weakening nearly three weeks into ​the US-Israeli war on Iran, with data from analysts showing tanking transaction volumes and some real estate agents pointing to price reductions.

The war, and ‌Tehran’s strikes against Israel, US bases and Gulf states including the United Arab Emirates, have pierced Dubai’s image as a safe haven for the world’s wealthy.

Real-estate transaction volumes in the UAE fell 37 per cent year-on-year in the first 12 days of March, and 49pc month-on-month, Goldman Sachs analysts estimated in a note published this week.

Some properties are already being offered at big discounts, with price cuts of 12-15pc, according ​to some real estate agents and messages on social media that Reuters reviewed.

For instance, a seller was looking for a “quick sale” for a property close to the Burj Khalifa — the world’s tallest building — a message shared by an agent read. The seller was looking for $650,000, down about 12pc from a previous price of $735,000 “due to the current situation”. The agent spoke on condition of anonymity because of the sensitivity of the matter.

An off-plan flat ​in Dubai’s coveted Palm Jumeirah was also being offered at a 15pc discount to its original price to around $2 million, according to a message reviewed by Reuters on a ​WhatsApp group created a week into the war.

Heading for a slowdown?

The UAE’s real estate boom has mirrored Dubai’s rise, but there were already concerns that the market was headed for a slowdown after five years of rising prices.

The conflict is the biggest test to date for the market, where demand was fueled by an influx of wealthy migrants attracted by the UAE’s tax-free regime.

Shares in property developers have ​fallen, with Emaar Properties, the........

© Dawn Business