Yasin Valimulla has spent the past year and a half selling Dubai’s most expensive homes to some of the world’s wealthiest people. Every single one of them has now left.
That detail captures the human scale of what has happened to Dubai’s luxury property market since conflict reshaped the region. Buyers who paid tens of millions for villas and apartments have walked away. Sellers have slashed asking prices by tens of millions of pounds. And the agents who built careers on the city’s extraordinary boom are now watching it unravel.
The numbers are stark. Property transactions in May dropped 19% from April alone, building on a 4% decline the previous month, according to ValuStrat, a Dubai-based research firm that has monitored the market since 2014. Sales now sit below half their volume from the same period last year. Haider Tuaima, head of real estate research at ValuStrat, described the downturn as unprecedented in recent memory. “The ready homes market has not recorded an annual decline of this magnitude since the pandemic,” he said.
A parallel assessment from Reidin, another Dubai-based research firm, painted an even sharper picture. Property worth 22.5 billion dirhams, roughly 6.1 billion US dollars or 4.5 billion British pounds, changed hands in May. That figure represented a 42% drop from April and roughly half the 46.6 billion dirhams sold in the month before the Middle East conflict erupted in late February.
The turning point was visceral. An Iranian missile struck a five-star hotel in the Palm Jumeirah area in March, sending shockwaves through a market that had been riding an extraordinary boom. That boom had made Dubai the world’s busiest hub for luxury real estate transactions. Knight Frank found that more homes valued between 2.5 million and 10 million US dollars were purchased in Dubai than in any other city globally at the end of 2025, surpassing London, New York, Los Angeles and Hong Kong. In the ultra-luxury segment above 10 million US dollars, Dubai recorded 9,050 sales compared with 6,577 in New York and 3,089 in London.
By contrast, the market today looks almost unrecognizable. Valimulla, a buying agent specializing in properties worth at least 10 million US dollars, said the few transactions still completing are happening at discounts of 20% to 25% from pre-conflict valuations. Western European buyers, traditionally a significant force in Dubai’s luxury segment, have grown reluctant to commit. “There was a lot of panic in March and there is still not much clarity to this day,” he said. “I think they want to wait out maybe a year, even two years. It depends on how things play out.”
The correction reflects deeper structural pressures, too. The surge in transactions over the past two years was unsustainable, Valimulla argued, driven by the city’s zero income tax policy that had attracted waves of high earners. “The numbers were so high to begin with, especially in the last two years,” he said. “There is going to be a correction in pricing, we just do not know the impact of that correction until we have geopolitical clarity.”
The ripple effects reach well beyond individual buyers and sellers. Richard Waind of the real estate group Cencorp warned that smaller brokers face closure. The market grew from approximately 1,000 brokers a decade ago to around 10,000 today, an expansion fueled by frenzied conditions that can no longer sustain that headcount. “The war has been a black swan event that was huge and swift,” Waind said. “The slowdown in sales is putting pressure on those smaller agencies that set up in a frothy market. That is going to fall.”
Meanwhile, the world’s wealthiest individuals are redirecting their attention. Milan, London and Singapore have emerged as alternative destinations for the nomadic super-rich seeking to diversify their property holdings away from the Middle East.
Whether Dubai recovers its position as the world’s premier luxury market depends on a question nobody can yet answer: how long before geopolitical clarity returns, and with it, the confidence of the buyers who have already gone.