Dubai realty in healthy phase
In 2013, Dubai saw prices and rents rise considerably in a fashion that was reminiscent of the city's economic boom in 2008. However, the quick growth sparked fears of an imminent bubble and as a result, there was a marked slowing down in 2014. Now, as we enter the new year, growth has come to a staggering halt.
Most analysts agree that this was absolutely necessary to ensure that the market doesn't face negative consequences. Caution needs to be exercised as the emirate's economy is now under threat with continuing falls in oil prices and the fact that there will be a 3% annual increase in new property projects over this year. Meanwhile, there is no signs that this will be matched by increases in the population at that income level.
While there's undoubtedly a greater self-awareness among players in the sector, developers show no sign of slowing down their growth. Arabtec recently announced that it won two contracts worth AED375 million from Emaar Properties to build over 1,000 town houses and villas in the Mira community and at Arabian Ranches. Meanwhile, a recent report by Meed revealed that contracts worth $27 billion were awarded in Dubai over a span of just 10 years as the emirate gears up to host the Expo 2020.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. While Dubai still has some lessons to learn, there's no doubt that the market is now healthier. Investors are being drawn by the dozen to the new mega-projects the city announces and regionally, the emirate has become the capital for economic activity. As Chairman of Damac Properties Hussein Sajwani put it: "Be it in terms of long-term political stability, currency stability, open rules and regulations, immense growth potential, excellent infrastructure, zero tax, number one airport in the world, logistics, quality of life, which city can replace Dubai today?"