Dubai Real Estate Investment: A Strategic Move Amid Global Trade Tensions

A Shifting Global Investment Landscape

As trade tensions escalate, the global economy is once again being reshaped by tariffs — predominantly initiated by the United States in an effort to protect domestic industries and address trade imbalances. China and other major economies have responded with countermeasures, further intensifying global uncertainty.

While tariffs are often positioned as levers of national economic policy, their impact reaches far beyond trade. From rising construction costs to shifting investor sentiment, real estate markets — particularly in global cities — are experiencing direct and lasting consequences. Historically, such macroeconomic disruptions have triggered strategic reallocations of capital, with investors seeking stability, yield, and long-term value.

Dubai, with its unique combination of political neutrality, strategic location, and investor-friendly governance, continues to emerge as one of the most compelling destinations for real estate investment amid global instability.

A Look Back: Global Real Estate During the Last Major Trade War

The 2018 U.S.-China trade war initiated by the United States under President Donald Trump, was part of a broader agenda to reduce the U.S. trade deficit and address what the U.S. government viewed as unfair Chinese trade practices.

Global capital markets were roiled by uncertainty. The National Association of Realtors reported that Chinese investment in U.S. real estate fell by 56% in 2018, as capital controls and geopolitical risk led investors to pull back.

Meanwhile, “safe haven” markets such as New York, London, and Dubai saw international property transactions increase by 3.5% during the same period. These cities benefited from a flight to safety as global investors diversified away from geopolitically exposed markets.

One of the most immediate effects of the global trade war on real estate was a steep rise in construction costs. The U.S. Chamber of Commerce found that tariffs on materials like steel and aluminum pushed global building material prices up by 5% to 10%.

These price shocks were felt worldwide — including the Middle East — due to the region’s heavy reliance on imported construction inputs, global commodity pricing, and multinational supply chains.

The UAE, while not a direct party to these tariff disputes, experienced indirect consequences through increased procurement costs and longer lead times for key materials.

Dubai’s Strategic Positioning in a Renewed Trade War Climate

Dubai has long been recognized as a global investment magnet; the UAE and China specifically also share a robust and growing strategic partnership under the Belt and Road Initiative (BRI).

Following Chinese President Xi Jinping’s visit to the UAE in 2018, bilateral ties have strengthened significantly. The Dubai Land Department (DLD) has opened multiple representative offices in China, including in Beijing and Shanghai.

In the wake of the tariff war, Chinese investments in UAE real estate surged by over 70% in 2019, following a 64% rise from 2016 to 2017. By the end of Q3 2018, Chinese nationals had invested over AED 1.7 billion in Dubai properties.

However, Dubai is not immune to global pressures. Building materials like steel and cement — often imported — have risen in cost. In 2022, construction material prices in Dubai increased by 8%, reflecting global supply chain constraints and commodity inflation.

Even so, the Dubai real estate investment market has remained resilient, with robust demand continuing to drive strong transactional activity.

Why Global Capital Is Flowing toward Dubai Real Estate

• Stable Market: Dubai’s real estate market is a less volatile alternative to global equities.

• Strong Cash Flow Opportunities: Dubai offers some of the strongest cash flow opportunities globally with stable returns and one of the frontrunners in terms of gross yields.
• Political Neutrality & Strong Regulations: Low taxes, 100% foreign company ownership, escrow regulations, introduction of REST & Ejari, and 10 year golden visa opportunities make Dubai a reliable safe haven for global capital.
• Infrastructure-Driven Growth: Over $200B in government-backed infrastructure investment is fueling long-term demand across all property segments.
• Strong Hedge Against Inflation: Prime property values and rents have consistently outpaced inflation, preserving real-world value making Dubai real estate a strong hedge against inflation.
• Strategic Global Location: Competitive edge as supply chains evolve and realign due to Dubai’s strategic location between Asia, Europe, and Africa — and world-class air and seaports — make it a natural beneficiary of capital reallocation in a fragmented global economy.

Beyond Expectations, A Global Safe Haven - Driven CEO’s Take

Abdullah Alajaji, founder and CEO of Driven Forbes Global Properties, has shared his insights on the Dubai real estate market amidst global trade tensions.

“The Dubai market has outpaced every market in terms of transaction and value growth year-on-year. Global investors and market participants will continue to see Dubai as a safe haven of a market.

The next phase of growth will likely see yields compress as a result of price appreciation as investors start seeing Dubai as a tier-1 city and reprice its risk.

In terms of global trade, with the lowest tariffs imposed on Dubai at 10% on goods, companies will look to ramp up production in order to reduce or eliminate the impact on earnings growth.

Recent developments have had little to no impact on the sentiment, with our investors maintaining their bullish outlook for the Dubai real estate market.”

Conclusion: Resilient, Yielding, and Strategically Positioned

Between 2018 and 2019, Dubai real estate investment — and global real estate investment in general — outperformed stock markets in terms of stability and investor sentiment.

While equities were rocked by tariff-driven volatility, real estate (particularly in safe haven markets like Dubai) provided a more consistent investment landscape, supported by proactive local policies and long-term capital inflow.

While the imposition of tariffs by major global powers presents challenges — including higher construction costs and tighter supply chains — Dubai stands apart as a resilient, high-performing real estate market.

The city’s pro-growth policies, macroeconomic stability, and ongoing infrastructure expansion support both near-term income generation and long-term capital appreciation. As geopolitical uncertainty pushes capital toward safety and consistency, Dubai is proving itself not only as a shelter — but as a springboard for strategic investment growth.

Whether you are seeking to preserve capital, generate strong yields, or diversify across markets with durable long-term fundamentals, Dubai real estate investment in 2025 offers a unique and timely opportunity.

For real estate investment advice please contact Driven Properties on (+971) 800-374836