Dubai has long marketed itself as a stable oasis in a turbulent Middle East — a secure financial hub where wealthy individuals could park capital, run businesses and plan for the long term. That image has been deeply shaken by the Iran war.
Iranian missile and drone strikes on Gulf targets produced an immediate economic shock: Dubai’s and neighboring Abu Dhabi’s stock markets initially lost about $120 billion (€103 billion) in value. Tourism collapsed, hotel occupancy fell from typical levels of 70–80% to around 20%, and flights to and from Dubai International Airport dropped by roughly two-thirds, according to Capital Economics.
Although air traffic, tourism and business arrivals had begun to recover during a tentative ceasefire, a fresh Iranian drone strike on the UAE’s Fujairah oil complex has underscored how prolonged tensions between Washington and Tehran would further damage Dubai’s reputation as a global business hub.
Safe-haven status on hold
Some high-net-worth individuals who embraced Dubai as a playground for the rich are now questioning whether it is the safe haven it claimed to be. Many have started moving parts of their assets to other financial centers, notably Singapore and Switzerland. Wealth advisers in both countries report a surge in inquiries from Dubai-based clients; Swiss private bankers expect tens of billions of dollars in new inflows from the Gulf.
These hubs, however, often attract different types of wealth. Switzerland appeals to European and global clients and relies on a long tradition of private banking and neutrality. Singapore tends to draw Asian-origin wealth and was a model Dubai later emulated in building a sophisticated ecosystem for family offices that manage investments, taxes and estate planning for wealthy families from China, India and Indonesia.
For many clients, the choice is between growth and preservation. Singapore is well placed to capture Asian growth, while Switzerland offers systemic distance from geopolitical hotspots and serves as an anchor for capital preservation. Rather than full relocations, many clients are diversifying: keeping operational businesses and lifestyle assets in the UAE while shifting long-term wealth or establishing a secondary residence in Singapore or Switzerland — a strategy some call “strategic hybridity.”
Real estate boom cools
Beyond immediate losses, the conflict threatens Dubai’s longer-term appeal to expatriates and businesses. The city’s cosmopolitan lifestyle helped fuel a real-estate boom that nearly doubled prime villa prices between the pandemic and the end of 2024. Now concerns are rising: in March, residential property transactions fell nearly 20% month-on-month to about $10.1 billion (€8.64 billion), and forecasts from Citi Research and Knight Frank point to a potential 7–15% price correction.
Despite this, most wealthy individuals are not abandoning Dubai entirely; they are hedging by diversifying holdings and establishing alternatives abroad.
Economic boom on hold
About a fifth of some advisers’ Dubai-based clients plan to stay, seeing the instability as temporary while efforts continue to reopen the Strait of Hormuz. For many others, having a foothold elsewhere is now essential insurance.
Before the war, Dubai’s economy was expanding: GDP grew roughly 4.7% in the first nine months of 2025. A record 9,800 millionaires moved to Dubai last year, bringing an estimated $63 billion in new wealth, according to Henley and Partners. The emirate’s fiscal appeal remains strong: no personal income tax, no capital gains or inheritance tax, and a corporate tax of 9% only on profits above about $100,000, with free-trade zones offering tax exemptions on qualifying income.
Popular for good reason
Over the past 50 years Dubai has transformed from a desert settlement into a global icon of engineering and innovation. Observers say if a ceasefire holds and confidence returns quickly, the city could rebound fast. Dubai remains home to marquee projects like the Burj Khalifa and other large-scale developments.
Sheikh Mohammed bin Rashid Al Maktoum has advanced plans to turn Dubai’s newest airport into the world’s largest aviation hub and to double the economy’s size by 2033. Future projects include a 93-kilometer climate-controlled sky-walkway called The Loop, the world’s largest artificial reef system, and an Artificial Moon resort.
While many wealthy investors are hedging by diversifying their assets and residences, fully exiting Dubai would mean abandoning an exciting, cosmopolitan lifestyle that remains a major draw.
Edited by: Tim Rooks