War puts brakes on UAE realty boom as Dubai projects face delays
Dubai: The West Asia war is set to slow down handovers in the UAE's otherwise booming under-construction property market, with several developers now staring at delays ranging from six to nine months amid input supply bottlenecks, cost-overruns and tighter bank financing.
Of the 45,000 units targeted to be handed over in 2026 in Dubai, about half will be pushed to 2027 or even later, according to data cited by Anarock Middle East. Overall construction cost has gone up by close to 30%, according to industry estimates.
Also Read: India’s booming Dubai gold trade may be built on someone else’s mines
Dubai's under-construction market accounts for nearly 70% of the emirate's total property transactions, driven by strong foreign investor demand, rising migration and aggressive project launches.
The emirate currently has nearly 1,592 active projects under construction comprising more than 482,000 units, with a combined value exceeding AED 366 billion.
"The delivery pipeline for 2026 is enormous by any historical measure. However, actual handovers will be far short of projections. A six- to twelve-month delay estimate is realistic if we go by the current market environment," said Anuj Kejriwal, chief executive, EMEA, at Anarock Group.
Last week, Wynn Resorts, which is building the UAE's first legal casino, confirmed a "modest" delay in the opening of its $5 billion integrated resort project in Ras Al Khaimah, originally scheduled to be opened in the first quarter of 2027. Its CEO Craig Billings reportedly said that the financial estimate for the project remained unchanged, although a longer construction period would marginally increase costs.
Supply disruption
With the UAE construction highly dependent on imports, input costs have surged between 18% and 28% across several categories. Premium ceramics, aluminium facade sheets, specialised decor materials and several mechanical, electric and plumbing (MEP) components are among the worst-hit segments.
"The US-Israeli strikes on Iran have had a severe impact on Dubai's construction supply chain. While Dubai's ports have not shut down per se, most shipping services have stopped and vessels have been rerouted via long detours," said Kejriwal.
Two of the Gulf's largest aluminium producers were hit by Iranian strikes in March. Emirates Global Aluminium's Al Taweelah facility in Abu Dhabi is estimated to take up to 12 months with full restoration of primary aluminium production, while Aluminium Bahrain has shut down close to 20% of its smelting capacity.
Official data show that nearly 58% of projects are still in the 0-20% construction phase, which makes them more vulnerable to supply-chain disruptions, logistics delays, contractor shortages and cost escalations, said Aditya Earnest John, a Dubai property market expert. Developers and contractors are already building buffer timelines into schedules, with six-month delays now looking realistic across several projects, he added.
Kejriwal concurred that projects that have not yet crossed the 60% completion threshold will realistically be delayed by 6-12 months amid the unreliable shipping, material lead-time extensions of anywhere between seven and 15 days on Asian routes, and disruptions in construction labour availability.
Escrow account-backed financing impacted
Developers relying on financing against escrow balances are now finding access to liquidity increasingly difficult as banks tighten underwriting amid rising risks.
"Banks that previously extended facilities based on escrow deposits are now more cautious and are focusing more closely on developer credibility. This is where real estate developers, and not just contractors, are facing stress," said Sahitya K Chaturvedi, secretary general of the Indian Business & Professional Council (IBPC).
Of the 45,000 units targeted to be handed over in 2026 in Dubai, about half will be pushed to 2027 or even later, according to data cited by Anarock Middle East. Overall construction cost has gone up by close to 30%, according to industry estimates.
Also Read: India’s booming Dubai gold trade may be built on someone else’s mines
Dubai's under-construction market accounts for nearly 70% of the emirate's total property transactions, driven by strong foreign investor demand, rising migration and aggressive project launches.
The emirate currently has nearly 1,592 active projects under construction comprising more than 482,000 units, with a combined value exceeding AED 366 billion.
"The delivery pipeline for 2026 is enormous by any historical measure. However, actual handovers will be far short of projections. A six- to twelve-month delay estimate is realistic if we go by the current market environment," said Anuj Kejriwal, chief executive, EMEA, at Anarock Group.
Last week, Wynn Resorts, which is building the UAE's first legal casino, confirmed a "modest" delay in the opening of its $5 billion integrated resort project in Ras Al Khaimah, originally scheduled to be opened in the first quarter of 2027. Its CEO Craig Billings reportedly said that the financial estimate for the project remained unchanged, although a longer construction period would marginally increase costs.
Supply disruption
With the UAE construction highly dependent on imports, input costs have surged between 18% and 28% across several categories. Premium ceramics, aluminium facade sheets, specialised decor materials and several mechanical, electric and plumbing (MEP) components are among the worst-hit segments.
"The US-Israeli strikes on Iran have had a severe impact on Dubai's construction supply chain. While Dubai's ports have not shut down per se, most shipping services have stopped and vessels have been rerouted via long detours," said Kejriwal.
Two of the Gulf's largest aluminium producers were hit by Iranian strikes in March. Emirates Global Aluminium's Al Taweelah facility in Abu Dhabi is estimated to take up to 12 months with full restoration of primary aluminium production, while Aluminium Bahrain has shut down close to 20% of its smelting capacity.
Official data show that nearly 58% of projects are still in the 0-20% construction phase, which makes them more vulnerable to supply-chain disruptions, logistics delays, contractor shortages and cost escalations, said Aditya Earnest John, a Dubai property market expert. Developers and contractors are already building buffer timelines into schedules, with six-month delays now looking realistic across several projects, he added.
Kejriwal concurred that projects that have not yet crossed the 60% completion threshold will realistically be delayed by 6-12 months amid the unreliable shipping, material lead-time extensions of anywhere between seven and 15 days on Asian routes, and disruptions in construction labour availability.
Escrow account-backed financing impacted
Developers relying on financing against escrow balances are now finding access to liquidity increasingly difficult as banks tighten underwriting amid rising risks.
"Banks that previously extended facilities based on escrow deposits are now more cautious and are focusing more closely on developer credibility. This is where real estate developers, and not just contractors, are facing stress," said Sahitya K Chaturvedi, secretary general of the Indian Business & Professional Council (IBPC).
Next Story