US–Israel policy under Trump and the Gulf: how the Abraham Accords changed Dubai’s investment map
US–Israel policy under Donald Trump changed the Gulf’s investment map chiefly through the Abraham Accords, signed in autumn 2020 with the UAE and Bahrain first. They opened direct flights, banking channels and tourist flows between countries that had no diplomatic relations, and Dubai gained most among the cities of the region.
What did Washington’s turn towards Jerusalem change?
It changed the context for the whole region. From its first months the Trump administration marked Israel out as a priority ally: the American embassy was moved to Jerusalem, sovereignty over disputed territories was recognised, and a hard line was taken towards Iran.
Those steps were argued over in the diplomatic community. From the point of view of markets they meant one thing: the United States was ready to support its partners in the Middle East decisively and in public.
For the Arab states of the Gulf it was a signal to rethink their own strategies. A shared concern about Iranian influence pushed the monarchies towards a pragmatic dialogue with Israel, which until then had been conducted only unofficially, for decades.
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Pragmatism prevailed over ideology, and that prepared the ground for the agreements that followed.
What were the Abraham Accords?
Agreements on the normalisation of relations between Israel and a number of Arab states, signed in autumn 2020 with the United States as mediator. The United Arab Emirates and Bahrain were the first. They opened the way to diplomatic missions, direct flights, trade agreements and joint technology projects.
For the business world the effect was that of a dam giving way. Companies in the two countries could work with each other directly, without intermediaries in third jurisdictions.
Israeli entrepreneurs began opening offices in Dubai, and Emirati funds began looking closely at Israeli technology start-ups.
The tourist flow between the countries grew rapidly, and that fed straight into hotel occupancy and into demand for short-term rentals.
What did Dubai gain?
More than any other city in the region. The emirate has historically positioned itself as a neutral business hub where people from any country can work comfortably, so a new stream of business visitors and tourists arrived on infrastructure that was already in place.
Tourism and hotels came first. Direct flights between Tel Aviv and Dubai made the Emirates a popular destination for Israelis, which supported the returns of hotels and of apartments let short-term.
Demand for property followed. Some of the new visitors became buyers: investors from Israel turned into a noticeable group in Dubai’s housing market, alongside buyers from Europe, India and the CIS.
Financial and technology ties were built as well. Banks and fintech companies in the two countries set up correspondent relationships, which simplified payments and the handling of transactions.
In diamonds and trade, the Dubai Multi Commodities Centre gained new participants, and trading companies gained access to Israeli markets.
How does geopolitics reach property prices?
Through the risk premium. Lower tension in a region reduces country risk, and with it the premium investors build into the return they require. When a region is seen as stable, capital accepts a lower yield and asset prices rise.
The experience of recent years has shown plainly that political decisions can move a property market no less than mortgage rates or the pace of construction do.
Dubai acts, in this logic, as the safe haven of the Middle East. Each round of regional instability has historically brought capital into the Emirates from less predictable jurisdictions.
Normalisation with Israel added a direct channel of business exchange to that effect, and strengthened the city’s position as a regional centre.
What risks should an investor allow for?
Reversal, above all. It would be a mistake to think geopolitical processes run in one direction only. The Middle East remains a region with a high concentration of conflicts, and an escalation in any of them can temporarily cool tourist flows and the mood of buyers.
An investor building a strategy over five to ten years is wise to allow for periods of turbulence in the model.
Practice also shows that Dubai’s property market has come through regional crises more steadily than many of its neighbours. A diversified economy that does not depend on a single source of income, free zones with foreign ownership and a consistent policy of attracting capital soften external shocks.
Short-term swings in sentiment are possible. Historically, though, regional crises have more often brought capital into the Emirates than driven it out, and the long-term direction depends above all on the balance of supply and demand inside the market itself.
Choosing property with geopolitics in mind
Bet on liquidity: central districts, recognisable projects, developers with a long history. Such assets recover faster after any external shock and are easier to sell at the moment an investor needs to leave a deal.
The same principle covers the case of a new conflict. Liquid districts and projects by reliable developers keep their demand whatever the conditions, so the choice of asset does more for an investor than any attempt to time the news.
The make-up of demand has changed too. Israeli investors and companies buy both homes for their own use and income-producing property, adding to the traditional demand from Europe, Asia and the CIS countries.
This piece dates from May 2025 and is not a forecast. Its point is a habit of mind: behind the price of a square metre there is always high politics, and the ability to read its direction gives an investor an advantage.
Frequently asked
Why does US policy towards Israel matter for the Dubai market?
Because it sets the general level of tension in the region. Normalisation widened tourist and business flows into the UAE, while any escalation makes investors more cautious. Dubai traditionally gains as a neutral venue.
Did the Abraham Accords change who buys property in the UAE?
Yes. A noticeable group of Israeli investors and companies appeared, buying homes for their own use and income-producing property, in addition to the traditional demand from Europe, Asia and the CIS countries.
Could a new conflict in the Middle East bring Dubai prices down?
Short-term swings in sentiment are possible, but historically regional crises have more often led to capital flowing into the Emirates than out of them. The long-term direction depends on supply and demand inside the market.
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