Amid the smoldering Iran war, wealthy elites are quietly shifting capital and other assets out of Dubai and heading to Singapore and Switzerland, raising questions about the emirate's safe-haven reputation.

Dubai has long built a reputation as an oasis of stability in the volatile Middle East region. The United Arab Emirates' second-richest emirate positioned itself as a secure financial hub where high-net-worth individuals could park capital, run businesses and plan for the long term with confidence.

That carefully built image, however, has been shattered by the Iran war. Iranian missile and drone attacks on Gulf targets triggered a sharp economic shock, and stock markets in Dubai and neighboring Abu Dhabi experienced a sharp downturn in the initial phase of the conflict.

At the same time, tourism cratered and hotel occupancy dropped to 20% from the usual 70 to 80%, and flights to and from Dubai International Airport plummeted by around two-thirds, according to the London-based research firm Capital Economics.

While air traffic, tourism and business arrivals are rebounding, the longer the standoff between Washington and Tehran lasts, the bigger the threat to Dubai's reputation as a global business hub.

Some high-net-worth individuals who embraced Dubai as the playground for the rich and famous have questioned whether it truly is the safe haven it promised to be. Many have turned to two other leading financial centers — Singapore and Switzerland — to park at least part of their assets.

Wealth advisers in both countries recently reported a sharp rise in enquiries from Dubai-based clients, with Swiss private bankers expecting tens of billions of dollars in new inflows from the Gulf.

But rather than being competitors, the two hubs tend to attract different types of wealth, says Ryan Lin, a Singapore-based lawyer and director at Bayfront Law. "Switzerland tends to appeal to European and global clients, while Singapore is more likely to benefit from Asian origin wealth," Lin told DW.

Till Christian Budelmann, chief investment officer at Swiss private bank BERGOS, described the shift as a "choice between growth and preservation." "Singapore is excellent for capturing Asian growth, but Switzerland remains the world's premier anchor for capital preservation," Budelmann said, adding that the Alpine nation "offers a level of systemic distance from geopolitical hotspots that Singapore ... cannot always guarantee."

Beyond the immediate slump, the conflict threatens Dubai's longer-term appeal to expatriates and businesses. The city's cosmopolitan lifestyle helped fuel a real-estate boom that saw residential prices jump since the pandemic. In March, the total value of residential property transactions fell nearly 20% month-on-month to about $10.1 billion, Bloomberg reported.

Forecasts for Dubai's property sector by Citi Research and real estate consultancy Knight Frank now point to a potential 7-15% price correction.

Despite the Iranian strikes, most high-net-worth individuals are not pulling out of Dubai; they are diversifying. Budelmann describes this as "strategic hybridity," where clients keep their operational businesses and some lifestyle assets in the UAE but shift long-term wealth and, in many cases, establish a secondary residence in Singapore or Switzerland.

Around a fifth of Lin's Dubai-based clients plan to stay put and view the instability as temporary. Before the war, Dubai's economy was booming: in 2025, the emirate recorded GDP growth of around 4.7%. A record 9,800 millionaires moved to Dubai last year, bringing with them an estimated $63 billion in new wealth.

Dubai watchers believe that if the ceasefire holds and confidence returns quickly, the city could rebound fast. Before the war, Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum, put in motion plans to turn Dubai airport into the world's largest aviation hub and double the size of the economy by 2033.

So, while many wealthy investors are hedging their bets, fully exiting Dubai would mean leaving behind an exciting, cosmopolitan life in the desert.

Source: www.dw.com