Dubai has long promoted itself as a safe, stable financial oasis in a volatile Middle East — a place where wealthy individuals could base businesses, store capital and plan for the long term. That reputation has been badly shaken by the conflict with Iran.
Missile and drone strikes linked to Iran triggered an immediate market shock: shares in Dubai and nearby Abu Dhabi initially lost about $120 billion (€103 billion) in value. Tourism plunged, hotel occupancy slipped from typical 70–80% levels to roughly 20%, and flights to and from Dubai International Airport fell by about two-thirds, according to Capital Economics.
After a brief respite during a tentative ceasefire, a fresh Iranian drone attack on the Fujairah oil complex in the UAE highlighted how prolonged tensions between Washington and Tehran could further damage Dubai’s standing as a global business centre.
Safe-haven status on hold
Some high-net-worth residents who treated Dubai as a secure playground are reassessing whether it still functions as a safe haven. Many are shifting parts of their portfolios to other financial centres, notably Singapore and Switzerland. Wealth advisers in both countries report a surge of interest from Dubai-based clients, and Swiss private bankers are preparing for what they expect to be tens of billions of dollars in inflows from the Gulf.
Those rival hubs tend to attract different kinds of money. Switzerland’s appeal rests on a long tradition of private banking, neutrality and an established client base across Europe and beyond. Singapore draws wealth originating in Asia and was a model for Dubai as it built up family office services that handle investments, taxation and estate planning for families from China, India and Indonesia.
For many clients the decision is between seeking growth or preserving capital. Singapore is well positioned to capture Asian growth, while Switzerland offers geographical and political distance from hot spots — useful for capital preservation. Rather than relocating entirely, a common response is to split exposure: keep businesses and lifestyle assets in the UAE while moving long-term wealth or opening a second residence in Singapore or Switzerland — a tactic some advisers call “strategic hybridity.”
Real estate boom cools
Beyond immediate market losses, the conflict threatens Dubai’s longer-term appeal to expatriates and companies. The emirate’s cosmopolitan lifestyle helped drive 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 transactions dropped nearly 20% month-on-month to about $10.1 billion (€8.64 billion). Citi Research and Knight Frank warn of a possible 7–15% price correction.
Despite that cooling, most wealthy residents are not deserting Dubai outright; many are hedging by diversifying assets and establishing alternatives overseas.
Economic momentum paused
Roughly a fifth of some advisers’ Dubai-based clients say they will remain, viewing the instability as temporary while efforts continue to reopen the Strait of Hormuz. For many others, having a foothold elsewhere has become essential insurance.
Before the war, Dubai’s economy was expanding: GDP grew about 4.7% in the first nine months of 2025. A record 9,800 millionaires relocated to Dubai last year, bringing an estimated $63 billion in new wealth, according to Henley and Partners. The emirate’s fiscal attractions remain clear: no personal income tax, no capital gains or inheritance tax, and a 9% corporate tax applied only to profits above roughly $100,000, alongside free-zone tax breaks on qualifying income.
Why Dubai still matters
In half a century Dubai has transformed from a desert settlement into a global symbol of engineering ambition and urban innovation. If a ceasefire persists and confidence returns quickly, observers say the city could rebound rapidly. Dubai still hosts landmark projects such as the Burj Khalifa and many large-scale developments.
Sheikh Mohammed bin Rashid Al Maktoum is pushing plans to turn Dubai’s newest airport into the world’s largest aviation hub and aims to double the economy by 2033. Ambitious future projects include a 93-kilometre climate-controlled sky-walkway called The Loop, the world’s largest artificial reef system, and an Artificial Moon resort.
Many wealthy investors are choosing to diversify rather than leave: keeping a base in Dubai for its lifestyle and business opportunities while placing long-term capital elsewhere. Fully abandoning the emirate would mean walking away from a cosmopolitan way of life that continues to draw people from around the world.
Edited by: Tim Rooks