Dubai’s yearslong property boom was always expected to deflate eventually. Iranian strikes on the city now appear to be puncturing the cycle, putting pressure on residential and commercial property prices — and on the people whose jobs depend on them.

Last year, more than 270,000 properties worth 917 billion dirhams ($250 billion) traded hands in a city with a population of 4 million people, according to Dubai Land Department data. The momentum continued in the early part of 2026, until Feb. 28, when Tehran retaliated against Gulf countries after the US and Israel launched strikes on Iran.

Sales volumes dropped almost 30% in March compared to the previous month, according to business news site AGBI. Prices are holding, possibly because agreements were struck before the war, but new deals will likely see discounts, with buyers seeking cuts of up to 30%.

With few tourists, remote work, and uncertainty affecting consumer spending, commercial real estate is also struggling, with hospitality taking the biggest hit. Hotel occupancy in Dubai for the week ending March 14 sank to 16%, down from the usual 90%. Hotels have responded with deep discounts: Some luxury properties on Palm Jumeirah have cut prices by as much as half.

“In the near term, we expect to see hotels pivoting their focus to domestic travellers and staycations, mirroring the strategies adopted during the pandemic,” Faisal Durrani, head of research at property consultants Knight Frank MENA, told Semafor.