The real estate market in one of the seven emirates of the UAE, which has been accelerating in recent years due to the announcement of a resort with a Wynn casino, has faced a serious cooling. The reason was the consequences of the US-Israeli conflict with Iran, which caused disruptions in supply chains, rising construction costs and a general slowdown in transactions. As of September 2024, about 45 construction projects were registered in the municipality, by the middle of 2026 their number exceeded 90, but many of them still have not received the certification necessary to start sales, which indicates an oversupply of applications against the background of real demand.
A number of well-known facilities have already been frozen or cancelled. Among them are DIC Hotel & Resort, Harbour Beach Residence and Lahiya Bay, while the construction of Tonino Lamborghini Residences has been suspended. The deadlines for the completion of branded projects have also shifted: the handover of Nobu Residences has been postponed from the fourth quarter of 2026 to the first quarter of 2028, and the W Hotel & Residences from the beginning of 2027 to the end of 2028. Experts attribute the delays not only to the war, but also to a nationwide shortage of contractors, which forces developers to create joint ventures to share risks.
The rising cost of construction and the soaring land prices before the conflict are under particular pressure. According to analysts, the cost of land has reached "astronomical heights," which makes many projects economically difficult even for large players.
Official statistics confirm the decline: in January 2026, the turnover of transactions fell by 55% year-on-year (to 250 million dirhams), and the volume of mortgage loans decreased by 88%, although the number of transactions increased by a third. Developer RAK Properties reported a 25% decrease in revenue in the first quarter and a 40% decrease in net profit before taxes, to 44 million dirhams. The company's shares have lost almost 22% since the beginning of the year.
Nevertheless, the market has not collapsed to pre-crisis levels. According to the Bayut portal, the average selling prices in June 2026 are 2,200 dirhams per square foot - just 3% lower than a year ago, but almost four times higher than in July 2021, before the announcement of the Wynn project. Thus, the current slowdown looks more like a correction after abnormal growth, but geopolitical instability and overheating of supply continue to pose risks for all market participants.
Source: Arabian Gulf Business Insight
