The ongoing tensions due to the Iran war have led many Indians residing in the UAE to reevaluate their property investments, particularly in Dubai. This situation has prompted a notable shift in focus towards real estate back home in India. Experts suggest that the traditional allure of Dubai as a safe haven for real estate investment is weakening, with a significant number turning their attention to India.

Changing Dynamics for NRIs

With approximately five million Indians residing in the UAE, many have enjoyed the benefits of long-term residency options like the Golden Visa. However, the conflict has prompted a considerable reassessment of Dubai’s status as a secure investment locale. Aayush Puri, CEO of residential sector operations at property consultancy Anarock, points out that first-time homebuyers and middle-income professionals are most likely to pivot their focus from Dubai to Indian markets. While high-net-worth individuals are still inclined to invest, they are more likely to scale back or diversify their investments rather than completely abandon Dubai.

The demand for real estate from NRIs has historically bolstered Dubai’s property market. Mumbai-listed Lodha Developers has a significant stake in this dynamic, with expatriate Indians accounting for about 4% to 5% of its sales in the region. The company’s CEO, Abhishek Lodha, has noted a modest drop in sentiment among these buyers, aligning with their desire to secure real estate in India amid growing uncertainties.

Precautionary Shifts in Property Investment

Many expatriates are not merely adjusting their real estate investments but are also adopting a version of precautionary buying. This strategy often involves securing a home base in India while retaining employment in the UAE. Mitil Chokshi, a senior partner at tax advisory firm Chokshi and Chokshi, states that senior professionals and individuals concerned about their job security in the UAE are increasingly considering purchasing homes back in India. He describes this trend as more precautionary than indicative of a mass relocation.

Further illustrating this trend, S Irudaya Rajan, chair of the International Institute of Migration and Development, noted that some expatriates are sending their families back to India while continuing to work in the UAE. This serves as a strategic move to retain stability and security for their loved ones, especially during uncertain times.

Dynamics of the Dubai Property Market

Despite recent cooling trends in Dubai’s property market—where over 38,000 homes were sold in the second quarter—a significant number of buyers remain active. According to Dubai Land Department figures, this represents a nearly one-third decline from a record year. Notably, Dubai developer Binghatti reports that Indian nationals make up about 11% of its buyers from within the UAE, while another 3% comes from Indians residing outside the country, making them the second largest group after Emiratis.

As the market shifts, buyers are becoming increasingly cautious. Chokshi observes that many are negotiating terms more rigorously and opting to invest in completed or nearly completed projects rather than off-plan developments. These buyers are scrutinizing the finer details of escrow arrangements and construction timelines more closely than before. However, he maintains that the evidence suggests a repricing of risks in the market, rather than a complete abandonment of investment in Dubai.

In summary, the ongoing geopolitical situation is reshaping real estate investment patterns for NRIs, with many choosing to prioritize property in India while reassessing their holdings in Dubai. This evolving landscape indicates a significant shift in how expatriates view their long-term financial and familial stability.