Dubai Luxury Home Sales Drop 17% Amid Iran Conflict

Dubai's luxury real estate market experienced a decline in sales volumes during the third quarter of 2026 as the ongoing war with Iran dampened investor confidence. Knight Frank reported that sales of homes priced at $10 million or more fell by approximately 17% compared to the same period last year, with 86 transactions recorded.

This slowdown follows a record-setting year in 2025 and a broader property boom that began in 2020. JLL estimates that average house prices have dropped by about 5%, with prime areas like Palm Jumeirah seeing declines of up to 9%. Total sales for properties valued over $10 million reached approximately $6.7 billion for the first nine months of the year.

While the regional conflict has pressured tourism, aviation, and trade, the return of expatriate residents in September helped shore up demand. Market analysts note that buyer interest in areas like Palm Jumeirah continues to stem largely from those seeking permanent or holiday homes rather than short-term investors.