The ongoing conflict in West Asia is causing significant disruptions in Dubai’s property market, affecting the handover timelines for numerous under-construction projects. Developers are now anticipating delays ranging from six to nine months due to issues such as supply chain bottlenecks, increasing construction costs, and stringent financing conditions. A report by Anarock Middle East indicates that of the 45,000 housing units slated for completion by 2026, nearly half may not be handed over until 2027 or beyond.

Impact of War on Construction Timelines

The UAE’s construction sector has been markedly impacted, with projected handovers notably falling short of expectations. According to Anuj Kejriwal, CEO of EMEA at Anarock Group, the anticipated delays in delivery schedules are becoming more apparent. The construction costs have surged by almost 30%, exacerbating the situation further. This delay in project completions is particularly concerning given that Dubai’s ongoing construction efforts contribute to roughly 70% of the total real estate transactions in the emirate.

Currently, Dubai hosts approximately 1,592 active projects, with a total of more than 482,000 units poised for development, valued at over AED 366 billion. The ambitious delivery plans for 2026 are now under scrutiny as actual handovers are unlikely to meet earlier forecasts. The projected six- to twelve-month delays reflect the current turbulence in the market.

Supply Chain Disruptions and Cost Increases

Supply disruptions have played a significant role in the delay of construction projects. The UAE’s reliance on imported construction materials has led to an increase in costs ranging from 18% to 28% across various sectors. Key materials such as premium ceramics and aluminium facade sheets are particularly affected. The ongoing US-Israeli strikes on Iran have introduced severe challenges to Dubai’s construction supply chain, with many shipping services suspended, resulting in rerouted vessels and delayed arrivals.

The effects are compounded by disruptions at major aluminium production facilities, like Emirates Global Aluminium’s Al Taweelah, which is experiencing long restoration timelines. As a result, nearly 58% of the projects currently exist in the early stages of construction, making them particularly vulnerable to the ongoing fluctuations in material availability and logistics.

Financing Challenges for Developers

The financial landscape for developers is also shifting, especially for those dependent on escrow account-based financing. With banks tightening their lending criteria amid growing uncertainties, developers are finding it increasingly challenging to secure liquidity. Sahitya K Chaturvedi, secretary general of the Indian Business & Professional Council (IBPC), notes that banks are now scrutinizing developer credibility more closely, indicating that it’s not just contractors feeling the pinch but developers as well.

With construction timelines growing longer and costs on the rise, many developers are forced to adapt their schedules, integrating buffer periods to compensate for the ongoing unpredictability. The overall outlook for Dubai’s real estate market remains uncertain, with industry experts cautioning that a clear path forward will take time, making adjustments vital for both project completions and financial stability.