The UAE’s years-long property boom faces its first real test after Iranian missile strikes shattered the Gulf’s safe-haven aura, rattling investors and exposing how heavily Dubai and Abu Dhabi rely on offshore money to sustain their building spree.

Reuters reports that developers who had been selling out off-plan launches within hours now confront a sharply changed demand backdrop.

Off-plan deals made up 65pc of Dubai transactions in 2025, according to Betterhomes, meaning most purchases were for homes not yet built. That pipeline may now face a far tougher market, with foreign appetite set to be the decisive factor.

On Wednesday, shares in Dubai and Abu Dhabi developers plunged. Aldar Properties, Abu Dhabi’s largest listed developer, and Emaar Properties, the force behind downtown Dubai and the Burj Khalifa, both fell 5pc, while bond prices of major developers dropped sharply.

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