Will Geopolitical Tensions Dampen Indian Investment in Dubai Real Estate?
Indians and people of Indian origin have emerged as significant contributors to the Dubai real estate market over the past two years. The escalating tension and ongoing conflict in West Asia have cast a shadow over the emirate. Despite this, the allure of Dubai’s real estate market remains strong. This article delves into the factors influencing Indian investment in Dubai and potential shifts in the market.
Indian nationals are the largest foreign real estate investor base in Dubai, accounting for over 20% of all foreign property purchases. According to estimates by Anarock Property Consultants, Indians and people of Indian origin invested up to ₹95,000 crore in residential properties in 2025, a sharp rise from ₹37,000 crore in 2023. Higher rental yields, particularly in residential properties, easy entry, the booming property market, proximity, and the investor-friendly UAE Golden Visa, which offers tax benefits and long-term residency, have all contributed to this surge. Not only individual investors, but several Indian developers have also announced plans to set up operations in the emirate to capitalize on its real estate prospects.
Dubai’s real estate market relies heavily on international investors and expatriate residents, with Indians leading the pack, followed by UK residents/citizens. The perception of rising geopolitical risk has likely led investors to temporarily adopt a wait-and-watch approach. Such sentiment shifts typically affect off-plan or under-construction property purchases and speculative investments first, as these segments tend to be more sensitive to market confidence. Investors were also lured by the 60-70% rise in property prices that Dubai witnessed since 2021. With prices set to correct in the near term, property consultants expect Indian and other investors to hold off on closing deals until there is clarity on where Dubai is headed.
India’s real estate market, on the other hand, has recovered sharply after the pandemic, with the residential sector leading the turnaround. Home sales have touched new milestones each year since then. The commercial office, hospitality, and logistics sectors have also seen a strong recovery, albeit with a slight delay. Institutional investments have been healthy, and the turnaround has brought back investors to the residential market, particularly non-resident Indians (NRIs), who had been in a prolonged slowdown before the pandemic.
Property analysts believe the real estate sector in India has reached its peak. Housing sales have already started to plateau after a sharp year-on-year rise. Home prices have also peaked, leaving a significant segment of buyers and investors out in the cold. While the market remains stable, keen investors have already invested capital over the last five years or so. Therefore, it is unlikely that India will benefit significantly from the crisis unfolding in Dubai. However, if India sees a steady return of people from Dubai, it could lead to some investment in the domestic property market.
Ultra-high-net-worth individual investors from India have been strategically buying properties in the UK, and this trend is expected to continue. The UK, far more expensive than Dubai, is preferred for capital appreciation and education-linked buying by students from HNI families studying there. Indians and NRIs also invest in Canada. The short-term disruption and the imminent price correction in Dubai may prompt Indian buyers to renegotiate deals. Some may see an opportunity to explore distressed deals in the emirate, though these may be few and far between. How quickly investor confidence returns once the geopolitical environment stabilizes will be worth watching.
