Will Geopolitical Tensions Impact Dubai's Real Estate Market? Indian Buyers and Businesses Reassess
Mumbai | Dubai: Amidst thickening war clouds and a lingering sense of unease, questions are swirling around Dubai, the alluring peddler of desert dreams. Will its red-hot property market, which has attracted the wealthy and aspiring, finally cool down? Are the first cracks beginning to show in luxury villa prices? Will it discourage affluent Indians from seeking residency in Dubai by buying citizenship of Malta or Cyprus, as many have done since the pandemic? Will Indian businessmen pause before opening shops in Jebel Ali or manufacturing units in the Kezad free trade zone? And, with its positioning as the cryptocurrency capital, can the metropolis successfully host TOKEN2049, billed as the world's largest crypto event, in April? These conversations are cropping up in living rooms, Iftar parties, and lawyers' chambers.
"I sense some Indian buyers would renegotiate their property contracts to get the best deal. Others would look for distress opportunities. There are different kinds of buyers and investors, and uncertainties create opportunities. They should, however, remain mindful that overseas property acquisitions are subject to the rules of India's Liberalised Remittance Scheme (LRS) which cap annual remittance and forbid leverage," said Moin Ladha, partner at the law firm Khaitan & Co.
In 2025, Dubai recorded $250 billion worth of real estate transactions, the highest ever, of which Indian buyers accounted for about 20-22%. Besides 6-9% rental yields, it was a hedge against rupee depreciation. A fortnight ago, a leading builder launched a Ramadan offer where buyers could pay half a per cent every month.
"Developers may offer discounts, and investors may enter at better valuations. But, they may simply hold the inventory and wait for the market to stabilise over a quarter or two. If the market remains subdued for a longer period, attractive deals may emerge," said Amit Goenka, CMD of Nisus Finance, which launched a $500 million Gulf-focused realty fund in 2024. According to Prashant Thakur, the research head of ANAROCK, a property consultant, in such times, off-plan sales - deals cut before or during construction - are typically impacted. 'Panic Selling', an aggregator tracking distress deals in Dubai and Abu Dhabi, claimed prices of some high-end properties have dipped 10-20%.
The price surge was partly stoked by Indians migrating to other countries and NRIs hurt by the UK's new non-domicile tax laws. They made Dubai their homes and became UAE tax residents, rarely staying in Malta, Cyprus, or in the Caribbean country which sold them new passports. Will such plans change?
Over the last few days, chartered accountant Harshal Bhuta has received anxious enquiries from Indian families weighing the possibility of returning and parking some of their funds in foreign currency accounts in GIFT City banks.
"It's no easy decision. These are first-generation NRIs who had planned to retire in Dubai and own quite a bit of gold. Unless India relaxes the customs baggage rules, current rules would allow them to bring back only limited quantities - apart from daily-use jewellery, women are permitted to bring in just about 40 grams of gold jewellery whereas men are allowed 20 grams," said Bhuta.
Vishal Gada, who specialises in tax and transaction structuring, said that besides security and standard of living, Dubai became a domicile choice because there's no personal income tax and obtaining a long-term visa is easier than in Singapore. But recent developments, he feels, could prompt some to reconsider relocation plans.
For decades, Indian businesses have set up UAE international trading arms - buying goods from India, South East Asia, and China, to sell in African and Gulf markets. With profits from these transactions parked in Dubai, it was a mechanism to save tax. Till the dust of war settles, such plans may be on pause.
However, for some of the regular travellers with UAE business links, the present turmoil could be a blip.
"What is the option? Given its lifestyle, infrastructure, and tax advantage, Dubai beats most cities. The way the UAE government stepped in to arrange emergency visas, transport, and hotel-stay has given comfort and security. Many may wait and watch, but we haven't received any request for cancellation of Golden visa applications. Things could slowly normalise once flights resume. I expect the UAE government to issue some reassuring statement to preserve Dubai's importance," said Deepali Pathak, co-founder of GlobalNorth, which offers residency and citizenship solutions to wealthy Indians settling abroad.
One of the plans to demonstrate that importance is TOKEN2049, a signature event in the calendar of the crypto fraternity. In a state where crypto kiosks flourish, property sellers accept digital coins, and workers use stablecoins to remit money to India and the Philippines, a successful hosting could help in turbulent times. Like others, the heretics of finance are hoping that April won't be the cruellest month.
