"Dubai Real Estate Prices Plummet 50%"? Has Global Investors' Property Investment Logic Changed?

Recent reports indicate that due to the spillover of Middle Eastern military conflicts into the UAE, Dubai’s core areas have been targeted, tarnishing its image as a “safe haven in the Middle East.” Social media has been buzzing with discussions about a “major adjustment in Dubai’s real estate market,” “Hong Kong benefiting,” and rumors of “Dubai property prices halving.”

According to Wind data, the Dubai Financial Market Real Estate Index (DFMREI) has shown a significant decline since late February, with a drop of over 30% in the past 20 days.

Meanwhile, Hong Kong’s advantage as a global capital safe haven has become more apparent. On March 15, Hong Kong Financial Secretary Paul Chan announced that Hong Kong remains a stable financial center and confirmed that some Middle Eastern family offices have arrived in Hong Kong, with global risk-averse capital increasing.

What is the truth about Dubai’s real estate market? Is capital really shifting en masse to Hong Kong? To clarify these facts, the “Daily Economic News” recently interviewed several Dubai real estate practitioners, residents, and industry experts to reveal the true market situation.

Claims of “50% Drop in Dubai Property Prices” Are Unfounded

After the conflict erupted, social media widely circulated claims such as “Dubai property prices have fallen 50%,” “Core projects like Palm Jumeirah and Burj Khalifa have been halved and sold off,” and “Chinese investors are trapped.” Some media claimed that “Dubai’s real estate market reverted to pre-2020 levels overnight.”

Cross-verification by the reporter shows these rumors are heavily exaggerated. Mainstream areas in Dubai have not experienced drastic price drops, nor are there cases of transactions halving in price.

In fact, Chinese capital has long been a significant force in Dubai’s real estate market. Over the years, Dubai has been like a glittering harbor of wealth, attracting global millionaires to allocate assets there.

Public data shows that currently, Chinese developers such as Gold Moon Properties and Tomorrow World are active in Dubai. State-owned enterprises like China State Construction and CITIC are also deeply involved in landmark projects.

According to media reports citing Dubai official data, by 2025, Chinese buyers will account for the top three overseas investors in Dubai real estate, with a share of 14%. In some popular developments, Chinese and Chinese-descended investors make up 20-30%.

“Online claims that Dubai property prices have plummeted are exaggerated; that chart (showing a 50% drop) is false,” said Sun Qiang, who has been working in Dubai’s real estate industry for over a decade. He stated that current Dubai property prices show no obvious downward trend, and local life, security, and supplies remain normal. However, the conflict has disrupted some potential investors’ plans.

He recalled that Dubai’s real estate market started the year well, but after the outbreak on February 28, there was some impact.

He mentioned that a Chinese client arrived in Dubai on February 27, paid a deposit the next morning, but after learning about the conflict in the afternoon, immediately requested a refund, causing several pending deals to fall through.

Additionally, Able, a senior Dubai real estate agent, said that luxury areas like Burj Khalifa and Palm Jumeirah have been largely unaffected, with prices remaining stable. Remote areas about 30 minutes from downtown saw slight declines of around 5%, but nowhere near the “halving” rumors.

Market transaction data supports this trend.

According to Dubai Land Department (DLD) data released in February, Dubai’s real estate transactions in February 2026 totaled approximately 16,979 units, up 5.1% year-on-year; average property price was 1,740 AED per square foot (about 39,500 RMB per square meter), up 12.2% year-on-year.

However, data from UAE’s leading property intelligence platform Property Monitor shows that from February 16 to March 17, the number of apartment transactions was 10,604, down 22.67% year-on-year. The average apartment price was 2,055,730 AED (about 3.86 million RMB per unit), down 0.88%, and the average price per square foot was 1,949 AED (about 37,400 RMB per square meter), down 3.53%.

One example is a 558-square-foot (about 51.84 square meters) studio apartment in Ras Al Khaimah, sold for approximately 1,232,903 AED (about 2.31 million RMB), roughly 44,600 RMB per square meter domestically.

Tang Hui, a four-star certified Dubai real estate agent, told the reporter that over the past three weeks since the escalation of the Middle Eastern conflict on February 28, transaction volume has been affected, but prices have not experienced significant drops. She considers the rumors of “halving” prices to be completely false.

Although prices haven’t been significantly impacted, the war has affected her business.

“I can be very straightforward: we’re basically unemployed now,” Tang Hui admitted. She used to handle about five client inquiries daily, with a minimum of three deals per month, and over ten during peak season. Recently, in the past three weeks, she has only closed one deal. “Many colleagues haven’t closed any deals.”

She emphasized that this does not mean prices are halving. “Why would I choose to sell at a 50% loss now? The war has only been three weeks; I can’t sell at a loss that big.” She added that properties already rented out are unaffected, and rental income remains stable.

She observed that about 90% of transactions are on hold, mainly because buyers are cautious. However, she also mentioned that some long-term investors still see opportunities, with one client who bought property worth several million RMB last week purchasing another unit.

Shift from Off-Plan to Ready Properties as Investment Preference

Lily (pseudonym), a lighting business owner who has lived in Dubai for 16 years, said that Dubai’s property prices remain firm, but the conflict has caused both buyers and sellers to hesitate.

Ms. Lu, who has been in Dubai for many years working in finance, also revealed that since late 2025, she has been exploring areas like Damac Hills and JLT. At that time, prices were still high, but she has since paused all investment plans due to the conflict.

She believes that areas like Jebel Ali, Dubai International Financial Centre (DIFC), and around the airport are at higher risk of attack, and property values there could decline significantly. Whether prices bottom out depends on the duration of the conflict.

JLL Greater China head Zhou Lin told the reporter that the geopolitical turmoil has not shaken Dubai’s market fundamentals. In 2025, Dubai’s real estate transactions exceeded 270,000, with a total value of 917 billion AED, a 20% increase year-on-year. The market’s strong start in 2026 continues.

He noted that market preferences have shifted: initially, about 60-70% of transactions involved off-plan properties, but after the conflict, 70-80% now favor ready properties, which have become the primary choice for investors. The rental yields in core areas remain stable, with Business Bay’s gross rental yield around 7%, and Downtown Dubai reaching 7.2-7.4%. Large-scale sell-offs are rare; only about 30% of investors are re-allocating assets due to short-term risks.

Some cautious buyers are waiting for better timing. Lily said, “I can feel the decline in transaction volume, but prices haven’t fallen. If prices drop, I might buy the dip, but I don’t see any signs of price cuts right now.”

Tang Hui told the reporter that the median price of Dubai properties over the past few years has been around 4 million RMB per unit, which can buy an 80-200 square meter apartment. Properties costing over 4 million RMB in Dubai can apply for a 10-year golden visa, attracting many international investors.

Official Confirmation: Some Middle Eastern Family Offices Have Arrived in Hong Kong

Meanwhile, Hong Kong, with its long-standing stable financial environment, comprehensive regulation, and its unique position connecting mainland China and the global market, has become a preferred safe haven amid geopolitical turbulence.

On March 15, Paul Chan, Hong Kong’s Financial Secretary, publicly emphasized that Hong Kong’s status as an international financial center continues to strengthen in terms of stability, security, and maturity.

He stated that in the face of global geopolitical uncertainties, the Hong Kong government will ensure smooth financial market operations, continue to optimize asset management services, and send a clear message that “Hong Kong is the most ideal platform for asset management.” This reassures global capital and confirms that some Middle Eastern family offices have already arrived in Hong Kong. Law firms, banks, and other institutions have also received related inquiries.

To further attract global family offices, Hong Kong is continuously refining policies. Paul Chan revealed that the Treasury has proposed legislation to expand tax incentives for family offices and qualifying funds, covering precious metals, digital assets, and more.

A Citi report in March 2026 pointed out that Middle Eastern geopolitical instability will continue to drive some risk-averse funds into Hong Kong. In the first week of March, net capital inflow from the Middle East into Hong Kong exceeded HKD 300 billion. Recently, Middle Eastern sovereign funds’ cornerstone subscriptions in Hong Kong IPOs increased from 18% to 39.2%. The influx of capital and talent may boost demand for residential and office properties.

Additionally, the Daily Economic News found that in recent Hong Kong IPOs, Middle Eastern sovereign funds such as Abu Dhabi Investment Authority (ADIA), Qatar Investment Authority (QIA), Kuwait Investment Authority (KIA), and Mubadala have frequently participated as cornerstone investors. This year, companies like Xiyu Technology, Jingfeng Medical, and Dongpeng Beverage have all seen Middle Eastern capital involved as cornerstone investors, covering sectors like AI, new energy, high-end manufacturing, consumer goods, and finance.

For example, Dongpeng Beverage’s cornerstone investors include a platform indirectly controlled by Qatar Investment Authority (QIA), which led the investment with USD 150 million through Al-Rayyan Holding LLC.

Similarly, Xiyu Technology, which listed in January, had Abu Dhabi Investment Authority (ADIA) as a cornerstone investor, subscribing at HKD 165 per share for 3.065 million shares, totaling about HKD 506 million.

Has the Priority of Global Investors Changed?

Hengsheng International Capital CEO Huang Lichong believes that in the short term, the tense Middle Eastern situation has indeed increased the weight of risk-averse capital flowing into Hong Kong. However, this is not a “massive relocation” of capital but rather an “incremental shift.”

“Dubai’s stock market and market sentiment experienced a noticeable rebound around March 10, due to expectations that the conflict might quickly subside, indicating that investors are mainly concerned with the duration of the war rather than a permanent rejection of Dubai or Middle Eastern assets.”

He added that Dubai’s real estate fundamentals remain solid. In 2025, transaction volumes hit a record high, and once the war ends, some of the diverted funds may return. Dubai’s zero income tax, high rental yields, and long-term growth potential remain attractive.

However, the asset allocation logic of high-net-worth clients has fundamentally changed.

Huang Lichong explained that previously, investors prioritized low-tax environments to maximize after-tax returns, which was a key reason Dubai attracted global capital. But in the current high-uncertainty geopolitical environment, wealthy individuals now focus more on risk-adjusted returns, asset liquidity, certainty, and family legacy governance. The ability to trade, settle, finance, and pass on assets smoothly has become more important than just low taxes. While low tax remains relevant, it is no longer the sole priority.

Zhou Lin believes that before the crisis, Dubai’s entire market was hot, with quality properties in core areas selling quickly. Off-plan and pre-construction projects were highly sought after, and investors followed trends. But after the crisis, global buyers are expected to become more rational and selective, focusing on core locations and high-quality, scarce ready properties. Dubai’s market will gradually align more with mature markets like Hong Kong and London, with increasing price divergence between core and non-core areas.

Observations from Dubai industry insiders and residents further confirm this market shift.

Sun Qiang admitted that after the conflict, his client inquiries halved. Most transactions now are driven by investors looking to “pick up bargains,” with everyone holding cash and waiting for clarity. “A month ago, I could easily sell 30-50 units; now, just a few deals are considered good. Many clients with buying intentions keep asking about the situation but are hesitant to act.”

Lily, who has returned to her home country due to the war, said Dubai lacks tangible productive capacity, and the conflict has shattered the city’s sense of stability. The future of the market is unpredictable.

“If the conflict ends in a month or two, Dubai might regain its ‘Middle East safe haven’ status, and the market could recover. But if the fighting continues, a rebound will be very difficult.” Although she is considering buying at a lower price, she has set a clear threshold—only if prices drop 30% will she buy, reflecting investors’ cautious stance.