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Despite heightened regional geopolitical uncertainty, demand in the UAE’s residential property market remains intact, with a significant proportion of buyers still planning to enter the market over the coming year, according to the latest investor sentiment survey by Savills Middle East.

The survey, conducted among investors, end users, landlords, tenants and prospective residents, shows that nearly 45 per cent of respondents intend to purchase property in the next 12 months, while a further 32 per cent remain undecided. This, Savills said, points to decision-making delays rather than a loss of underlying demand.

After several years of strong post-pandemic growth, the residential market is now moving into what Savills describes as a more balanced and mature phase. Transaction activity remains high by historical standards, supported by population growth, capital inflows and a strong development pipeline, but momentum has moderated in recent months as buyers take a more cautious approach.

“The data clearly shows that demand remains intact,” said Andrew Cummings, head of residential agency at Savills Middle East. “What we are seeing is a shift in behaviour rather than a drop in interest. Buyers are taking more time, becoming more selective and focusing on fundamentals such as location, quality and long-term value.”

Importantly, the slowdown is not being driven by distress selling. More than 60 per cent of existing property owners surveyed said they plan to hold or expand their portfolios over the next six months, with only around four per cent considering selling. This lack of selling pressure has helped support prices across several segments, even as transaction volumes soften.

Cummings said this reflects continued confidence among owners following recent years of strong gains. “The absence of widespread selling pressure reflects continued confidence among existing property owners,” he said. “As a result, the market is moving towards a more balanced and sustainable phase rather than experiencing any structural correction.”

Pricing expectations, however, have moderated. More than 80 per cent of respondents expect prices to either remain stable or soften over the next year, contributing to longer transaction timelines and increased negotiation, particularly in the apartment segment where supply is perceived to be higher.

Andrew Cummings, head of residential agency at Savills Middle East

Savills noted that this has created a gap between buyer expectations and seller pricing, resulting in slower deal-making rather than outright price declines.

Buyer preferences are also shifting. Around 60 per cent of respondents expressed a preference for ready properties, compared with about 23 per cent favouring off-plan homes, reflecting a growing emphasis on certainty around delivery, pricing and immediate usability.

External factors are playing an increasingly important role in shaping sentiment. Regional and geopolitical uncertainty emerged as the single biggest barrier to market entry, outweighing traditional concerns such as pricing or financing. Even so, Savills said the survey showed little evidence of “knee-jerk” seller reactions.

Looking ahead, the firm expects the market to continue adjusting in the near term, with softer transaction volumes and more deliberate deal-making. While secondary apartments may face greater pressure, villas and prime residential assets are expected to remain relatively resilient, supported by the UAE’s long-term fundamentals and population growth.