Dubai off-plan demand holds firm

Dubai’s off-plan apartment market has continued to draw buyers despite geopolitical turbulence, with sales in March reaching AED 17.5 billion, or about $4.8 billion, and transaction volumes climbing to 7,983 deals, according to an analysis of Dubai Land Department data. The figures suggest that investor appetite in the emirate’s residential market has so far remained intact even as regional conflict has unsettled broader financial markets.

The March data showed off-plan residential apartment sales rising 12.9 per cent from a year earlier, while deal volumes increased 2.3 per cent. Those gains stand out because they came during a period when the wider Gulf investment climate was being tested by the war involving the US, Israel and Iran, which has weighed on equities, energy markets and risk sentiment across the region.

For Dubai, the numbers offer evidence that the property market’s core draw remains powerful. Investors have continued to back projects tied to population growth, rental demand, long-term residency incentives and the emirate’s role as a regional business and wealth hub. Even so, resilience in one part of the market does not remove broader concerns. Reuters reported in March that analysts had already begun to detect early signs of weakening in the wider property sector, with softer transaction activity in the opening days of the month and some sellers offering discounts in select areas.

That contrast is central to understanding Dubai’s market at this point. Off-plan homes, especially apartments, continue to benefit from investors willing to buy on future delivery and spread payments over time. At the same time, completed property and secondary market sentiment are more exposed to shifts in financing costs, confidence and headline risk. Goldman Sachs analysts cited by Reuters estimated that UAE real estate transaction volumes in the first 12 days of March were down sharply year on year, while some brokers pointed to price cuts of 12 to 15 per cent on certain properties marketed for quick sale. Median transacted prices, however, were described as only modestly lower.

The off-plan data also highlight where demand is concentrating. Dubai Islands led the market by value with AED 1.3 billion from 402 transactions. Madinat Al Mataar, near Al Maktoum International Airport, ranked second by value at AED 1.2 billion and led by volume with 809 transactions. Jumeirah Second followed with AED 1.1 billion, driven by a handful of very high-value deals in the Dubai Peninsula development. Dubai Land Residence Complex and Jumeirah Village Circle also remained among the busiest locations by number of sales, underlining the breadth of demand across both emerging master developments and more established mid-market clusters.

Luxury sales were another notable feature of March. Aman Residences Dubai recorded one of the costliest off-plan apartment transactions ever seen in the city, with a 31,201 square foot unit changing hands for AED 422 million. The same project also logged another sale worth AED 356.2 million. At the other end of the pricing spectrum, high values per square foot were recorded in South Square at Madinat Al Mataar, showing how buyers are still willing to pay premiums for specific locations, brands and product positioning.

Developers and investment executives have argued that the market’s foundations remain stronger than during earlier boom cycles. Dubai continues to attract overseas capital, and investors looking at multi-year returns appear less inclined to react to day-to-day volatility. Reuters quoted market participants saying transactions had not stopped and that some buyers were actively looking for opportunities created by stress elsewhere in the market. That view is reinforced by the continuation of large-ticket purchases even during the conflict.

Still, risks are becoming harder to ignore. Dubai’s reputation as a safe haven for global wealth has been one of the strongest supports for its property expansion, and that image has come under pressure since missile strikes and military escalation touched the Gulf. Reuters reported that Citi had warned the conflict introduced considerable risk to assumptions about Dubai’s future population growth and that, in a bearish scenario, property prices could fall by an average of 7 per cent annually through 2028. Shares in Emaar Properties, one of the market’s flagship developers, were also reported to have fallen more than 26 per cent on the Dubai bourse since the war began.

Authorities have moved to cushion the economy more broadly. Dubai announced economic facilitation measures worth AED 1 billion, due to be implemented from 1 April for three to six months, aimed at helping businesses and families manage current conditions. That step signals that policymakers are aware of the pressure created by regional instability, even as headline property numbers continue to show pockets of strength.