Price-drop expectations among UAE homebuyers eased to 63% in May, while more residents opted for new rental contracts as buyers and sellers moved closer on valuations, according to Property Finder.
The gap between what UAE homebuyers are willing to pay and sellers’ asking prices narrowed further in May as the property market regained momentum following a slowdown triggered by the regional conflict.
According to the latest analysis by Property Finder, the share of buyers expecting property prices to decline eased to 63 per cent in May, down from a peak of more than 70 per cent immediately after the conflict began. The figure marked the second consecutive monthly decline, while sellers largely maintained asking prices close to pre-conflict levels.
Before the conflict, buyer sentiment in the UAE was relatively balanced. Property Finder’s consumer sentiment survey conducted in January and February found expectations were almost evenly split, with 36 per cent of respondents anticipating a decline in property prices, 35 per cent expecting prices to rise, and 29 per cent believing they would remain stable.
Once the conflict began, most buyers shifted to expecting price reductions and delayed purchases in anticipation of better deals. Those expectations have eased steadily each month since, with the share of buyers anticipating price declines falling to 63 per cent in May, signalling a gradual return to more balanced market sentiment.
Sellers, meanwhile, have made only minor adjustments. Property Finder’s proprietary listing price index showed advertised asking prices in May were about two per cent below pre-conflict levels, compared with around one per cent below in April. As sellers largely held firm on prices, the gap between buyer expectations and asking prices continued to narrow.
Price discovery under way
Cherif Sleiman, Chief Revenue Officer at Property Finder, said the market is moving through a period of price discovery, where buyers and sellers gradually converge on a shared view of property values.
“When buyers and sellers sit far apart on price, deals take a pause, and that distance is exactly what’s narrowing now. What matters is how it’s narrowing: through expectations settling, not through panic on either side. A market where more people expect prices to hold is steadier ground than one swinging between fear and optimism, and that steadiness usually has to come first. Typically, the two sides close that gap before deals start picking up again, not after, which is why we watch this behavioural pattern as closely as the transaction numbers themselves.”
Rather than weakening, demand has shifted towards the rental market, with more residents choosing to rent while waiting for greater clarity on property prices. New rental contracts in May were just 20 per cent below pre-conflict levels, improving from 32 per cent below in March.
Nearly half of all rental activity in May—47 per cent—came from tenants moving into new homes rather than renewing existing leases, up from 41 per cent in March, pointing to renewed momentum in the rental market.
Gap continues to narrow
Alessia Sheglova, CEO of Dacha Real Estate, said current market conditions reflect a strategic approach from both buyers and sellers rather than panic.
“From what we are seeing on the ground, this is not a market defined by panic, but by a more disciplined approach from both buyers and sellers. Buyers are negotiating harder and are much more data-driven, but they are also realising that well-priced and desirable properties are not being heavily discounted. Sellers, on the other hand, are still holding relatively firm, especially where the property is in a strong location or priced sensibly. The gap is closing, but it is closing through more realistic expectations rather than a sharp correction.”
Sam McCone, Managing Partner at McCone Properties, said the divide between buyers and sellers is narrowing every day.
“When the conflict first started, many buyers made offers well below asking prices, expecting sellers to be under pressure to sell. While there were some distressed sellers, they were fewer than many anticipated. Buyers are still negotiating hard, but the lowball approach is fading because serious purchasers now recognise they can secure a good deal without expecting unrealistic discounts. Sellers with sensibly priced properties are completing transactions, and deals that stalled earlier this year are now progressing as both sides align on where value truly lies.”
