UAE property draws Iranians, despite crisis

• UAE golden visa boosts appeal
• Tensions test market confidence
• Long-term outlook favourable

Real estate deals in the UAE are holding steady as war flares between Iran and Israel, even as the tensions test the Gulf state’s long-held safe-haven status.

Some brokers say interest from Iranian nationals surged in the days before the attacks began last Friday.

“Iranians are rushing to Dubai,” Sidharth Kumar, sales manager at Forest Hills Real Estate, told AGBI. 

“Many are reaching out through Iranian colleagues or family members already in the UAE to buy a home here. They are interested in properties that are handing over now or close to handover.”

The UAE’s golden visa programme, which grants long-term residency to real estate investors above a certain threshold, has added to the country’s appeal for those seeking stability.

“People have sold all their businesses [and assets] in Iran and bought buildings or entire floors in bulk, directly from developers in Dubai,” another agent said, asking not to be named. 

“Instability elsewhere always drives demand here. There are few cities that offer such safety and security, and where it’s possible to get a visa.”

However, Iranian buyers are now struggling to move money out of the country, with traders reporting that authorities have blocked websites from posting exchange rates. 

Iran’s central bank, whose website failed to load on Thursday, has also reportedly restricted deposits and digital currency transfers to prevent capital flight.

Developers say investor demand in the UAE remains firm despite the volatility.

“I’m looking at the sales that happened over the weekend and yesterday and today – nothing changed,” Carlos Wakim, CEO of Bloom Holding, a subsidiary of Abu Dhabi investment firm National Holding, said on Tuesday.

“Even the difficult products are being sold.”

Most of Bloom’s projects are in Abu Dhabi, including its AED9 billion ($2.45 billion) Bloom Living development in Zayed City, but the company is also expanding into Dubai.

“Abu Dhabi has always provided a safe haven to any capital coming in,” Wakim said.

Economists, however, warn the conflict could accelerate a broader market slowdown.

“The regional conflict comes at a time when a property correction already appeared to be underway, caused by fundamental factors such as oversupply and more subdued demand,” Tim Fox, partner and economist at Dubai’s Capital Gate Advisors, said. 

“To the extent the conflict makes a difference it will be to reinforce the caution that already exists.”

Fox said the UAE’s safe-haven status “might only become questioned should the conflict become more protracted and wider” but long-term prospects “remain favourable,” particularly if the conflict is resolved quickly.

• Gulf economies brace for escalation in Israel-Iran war
• As protectionism rises, UAE real estate becomes a global shock absorber
• Branded homes in Abu Dhabi cheaper than Dubai and RAK

“Any Iranian capital that could flow into Dubai real estate as a safe haven probably already has,” Justin Alexander, director of Khalij Economics and the GCC analyst for Global Source Partners, said.

“Even if the real risk of the UAE being hit by munitions is very low, this has to have some impact on confidence and pricing. The longer the war drags on the worse this will be.”

Anita Gupta, CIO of Wealthbrix Capital Partners in Dubai, said the UAE continues to benefit from non-oil growth so a longer-term investment scenario is likely to be based on economic growth and corporate profitability. 

“In the short term we expect volatility,” she said. “The current escalation will have temporary effects on travel and tourism.

“However, expat residents see the UAE as a permanent home – many with well established businesses here.

“The UAE was established in 1971, with many regional escalations since then, [but] it has never seen any instability.”