Dubai's real estate market recorded transactions worth AED 3.8bn ($1.03bn) on March 16 through 1,194 deals, according to data released by the Dubai Land Department. Sales accounted for the largest share, reaching AED 2.93bn ($798mn) across 930 transactions.

The spike in sales indicates an exodus of expatriates, given the ongoing Gulf War with Iran. Western media have reported several incidents of authorities in the Emirates arresting foreign residents for taking photos of the ongoing drone strikes across the country, with authorities in interviews saying it was needed for the security of the country. 

The UAE has suffered multiple missile and drone strikes, including attacks on Dubai International Airport and a separate strike in Abu Dhabi on March 16 that killed at least one foreign person.

The security situation may be prompting residents to liquidate property holdings amid uncertainty about the broader trajectory of the Middle East.

The most prominent deals included properties in Al Yalyis 5, valued at AED 515.6mn ($140mn), followed by Palm Jebel Ali, with transactions totalling AED 387mn ($105mn), and Dubai Land Residence Complex, totalling AED 187mn ($51mn).

Mortgage transactions reached AED 718.3mn ($196mn) across 243 deals. The largest mortgage was recorded in Dubai South (Dubai Aviation City) at AED 214.4mn ($58mn), followed by Dubai Studio City at AED 82mn ($22mn), and Meydan One with mortgages worth AED 81mn ($22mn).

Property gifts contributed AED 164mn ($45mn) across 21 transactions. The most notable gifts were registered in Mohammed Bin Rashid City – District One, valued at AED 43.5mn ($12mn), Business Bay at AED 34.3mn ($9mn), and Jumeirah Islands worth AED 28mn ($8mn).

Around 385,000 residential units are under construction in Dubai, with roughly 80% due for delivery between 2026 and 2028. The volume arrives as demand assumptions are being revised sharply downward.

Citi Bank now projects just 1% population growth for Dubai in 2026, down from roughly 4% in recent years. A modest recovery to 2 to 2.5% is expected over 2027 to 2031, but that remains well below the trajectory that supported the property boom.

"The ongoing US-Iran conflict introduces considerable risk to Dubai's future population growth expectations and hence real estate demand, as it potentially questions Dubai's safe-haven appeal," the report said.

In the bear case, assuming no construction delays and a population decline in 2026 followed by a slow recovery, prices could fall by an average of 7% per year through 2028, producing a cumulative 20% drop against 2025 levels.

Even Citi's most optimistic scenario produces flat prices over three years, assuming half the supply pipeline is delayed and population growth recovers to pre-war levels.

International buyers, who have historically driven price discovery at the top end of the market, are the most exposed segment. A sustained pullback in foreign demand would reset expectations across the board, Citi said.

"International buyer demand could be disproportionately affected by any perceived decline in Dubai's safe-haven status, partly also dependent on the length of the current conflict," the report said.