International real estate investors are seeking alternative routes for "risk diversification" and to "create a Plan B" in the wake of the conflict between the U.S.-Israel and Iran, with Türkiye standing out among these options, according to a report on Tuesday.
It has now been around one-and-a-half months since the conflict erupted, turning into a regional tension following U.S. and Israeli attacks on Iran and Tehran's retaliations.
Dubai – ranking high among the locations where Turkish citizens purchase the most property – continues to be negatively affected by the Middle East crisis. Accordingly, the spread of attacks between the U.S., Israel and Iran to other regional countries has led to a drop in property sales in Dubai, which had become a focal point for international investors.
According to the digital platform DXB Interact, which provides data on the real estate market in Dubai, property sales dropped from 17,027 units (between Feb. 2 and March 1) to 11,828 in the four weeks after the conflict began (March 2-29). Thus, the initial decline in sales of 25% rose to 30.5% over the course of a month.
The transaction volume also dropped by 36% in one month, falling from $16.53 billion to $10.58 billion, according to the report by Anadolu Agency (AA), citing platform data.
Moreover, industry representatives suggest that international real estate investors are seeking alternative routes for "risk diversification" and "Plan B" because of the war.
International real estate expert and CEO of Level Immigration and Properties, Haitham Ahmet Alamarioğlu, said they expect the decline in property sales in Dubai to continue in the short and medium term. He stated that without a permanent cease-fire, international investors would remain in a wait-and-see position.
"Without a permanent cease-fire, trust will not return, and transaction volumes will not recover without trust," Alamarioğlu said.
"In such scenarios, having a Plan B shifts from precaution to necessity. Historically, it has taken at least 12-18 months for geo-politically triggered corrections in Dubai to reverse. This time, it might take even longer," he added.
Additionally, Alamarioğlu stated that early data indicate a 4%-5% drop in prices, adding, however, that the main pressure "hasn’t been fully felt yet."
"When transaction volumes fall, prices react with a delay. Sellers first resist lowering prices, the market freezes, then the correction comes. A more pronounced correction in the next quarter is highly likely."
Still, Alamarioğlu remarked that Dubai’s story isn't over, but argued that its "safe haven" narrative took a significant hit.
"Dubai partially lost its appeal. There’s no sudden exodus, but a gradual rebalancing. Investors are now asking, 'If I need to exit this market tomorrow, what’s my Plan B if I can’t quickly sell my property and my capital gets stuck here for my family?'"
He went on to say that Türkiye, Greece and Panama are standing out as three alternative destinations for international property investors.
He noted a significant increase in demand from Iranian and Gulf-based buyers in Türkiye, which he tied to its "citizenship by investment" program.
"This is driven by visa-free entry, cultural proximity, and it being one of the rare accessible ways to obtain full citizenship through property acquisition," he noted.
He also mentioned the Golden Visa program in Greece, as well as the "qualified investor program" in Panama, which grants permanent residence in 30 days.
Özden Çimen, international real estate expert and CEO of Parcel Estates, also stated that recent developments in the Middle East have put investors in a "wait-and-see" mode, and there hasn't been panic selling yet.
Çimen said that Dubai's zero income tax, high rental yields, secure regulatory environment, and high liquidity still attract investor interest. She also mentioned the recent rise in the Dubai Financial Market Real Estate Index, which tracks real estate company shares, after the cease-fire talks.
Çimen conveyed that Dubai hasn't lost its allure, but suggested that international investors are diversifying geographically.
"Recently, investors have been considering locations like London, Lisbon, Istanbul, Miami and Barcelona as additional portfolio destinations. We can view this as a risk diversification strategy."
