Navigating investment decisions: To buy or sell in the wake of Trump’s tariffs?

In an era where global economic activities are deeply interconnected, Dubai’s real estate market is not immune to the ripple effects of international policy shifts, such as the tariffs introduced by US President Donald Trump. 

These types of global events create a sense of uncertainty, a word investors dislike more than anything else.

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The global economic landscape is complex, with countless moving parts influencing markets simultaneously. To predict with confidence how these shifts will affect Dubai real estate is not only above anyone’s pay grade — it would require a crystal ball. The only certainty is uncertainty itself.

Rather than guessing, it’s more rational and practical to frame the outlook into two clear scenarios:

1. Stability holds: The Dubai market continues on its current path — steady, resilient, and attractive to both investors and residents.

2. Global downturn impact: If global economic conditions worsen, Dubai’s market — like others — may face a temporary correction or slowdown.

Whether you’re an investor, broker, developer, or tenant, now is the time to think with both agility and logic, and prepare accordingly.

Investors: Those with strong holding power likely have little to worry about long term. But short-term opportunity cost must be considered. If the market drops, some may regret not optimising sooner. But if the market rises, overly defensive moves may mean missing upside gains. 

Therefore, have a strategy for both scenarios, and be ready to act within a 72-hour window based on how the market reacts.

Brokers and developers: Now is not the time to hype or instil fear. It’s about guiding clients based on their individual motives and goals. Real professionals don’t push, they advise with context.

Buyers and tenants: If you’re not yet exposed to the market, current conditions may offer leverage, especially when dealing with motivated sellers who prefer to act before the market moves either way. 

Clarity always follows uncertainty. Those who prepare early, often benefit most. One clear truth that industry professionals understand but rarely say out loud is this — when buyers see an opportunity for price gain, sellers see it too, and raise prices, making negotiations harder.

And when sellers sense prices might drop, buyers see the same thing, and wait, holding off until prices actually come down. This is why markets stall or surge so quickly. Everyone reacts to the same signals, but from different sides of the table.

Dubai distinguishes itself in the global economic landscape as a foremost choice for both living and investment. Renowned for its state-of-the-art luxury infrastructure, tax-free environment, and exceptional safety, Dubai is considered the most vibrant and secure metropolitan area in the world. This safety standard sets it apart from other major cities.

Additionally, the UAE’s foreign policy is marked by its long-term effectiveness, neutrality, and robust economic diplomatic relationships. The UAE government’s capability to swiftly convert challenges into opportunities was prominently displayed during the Covid-19 crisis in 2020, establishing a global standard for adaptive governance.

Confidence in Dubai’s real estate market is anchored in objective, transparent facts and data accessible through DXBinteract, as mandated by the Government of Dubai’s Land Department. Current figures underscore this confidence: a total sales value of Dh151.8 billion (excluding mortgages) represents a 25 per cent increase year-to-date; transaction volumes of 48,000 (also excluding mortgages) mark a 19 per cent increase from last year; and an average price per square foot rise of three per cent over the same period last year.

This robust data transparency assures that market movements are based on real value, not speculation. Although many investors are ready to leverage any softening in the market, there is currently no prevalent rush or panic among sellers to offload their assets quickly, reflecting the market’s stability and maturity.

Importantly, unlike the stock market, real estate trends take time to manifest in the data, often unfolding over several months.

Investors need to consider their financial capability to maintain investments under varying market conditions. Asset characteristics are crucial; for instance, while land has seen significant appreciation in thriving markets such as in Dubai over the past three years, these assets typically underperform in slower markets due to their lack of income potential, and the banking sector’s hesitance to accept land as mortgage collateral.

A strategic approach would classify properties based on their market liquidity and transaction velocity, enabling well-informed investment decisions.

The upcoming months promise to be pivotal for the Dubai real estate market. Stakeholders should stay informed and adaptable to navigate potential challenges and capitalize effectively on emerging opportunities.

The writer is CEO of fäm Properties