Despite the decline in oil prices, diversified economy, improved regulatory legislation, investors’ confidence, stable demand for rent and the prospect of Expo 2020 will keep housing prices in Dubai from falling this time, reputable experts in the field of Dubai real estate believe.
To date, Dubai shows all the evidence of a matured developing housing market, said Siddharth Mehta, an expert from the KPMG Lower Gulf.
Last time when Dubai saw a decline in oil prices to the current level, namely in 2003, the emirate was a completely different place for expat investors. Only a few residential areas on the outskirts of the city were available for expat property buyers. Today the city is, without exaggeration, a world main attraction for real estate investors from all around the world. Their number, as well as the investors’ confidence in the Dubai property market’s future is constantly increasing. And this is one of the main reasons why the experts do not expect a further decline in Dubai property prices, despite the drop in oil prices.
More reliable regulatory legislation substantially revised in recent years eliminates the factor of speculation in the housing market, which significantly affects the surges and drops of real estate prices. Dubai Land Department has introduced the The Investor Protection Law and the Code of Corporate Governance for Developers, also doubling the registration fee. This is the second reason why Dubai property prices today are more stable.
Despite a large number of new residential units being handed over each year, Dubai’s population keeps growing keeping the demand for rents at place. This guarantees a handsome ROI to property owners, which in fact is one of the highest in the world. Due to this fact, Dubai real estate attractiveness for investors, along with property prices are still at a consistently high level.
Expectations tied to the Dubai World Expo 2020 also ensure a robust stimulus for the emirate in the field of real estate development and infrastructure. A number of mega-projects, residential and commercial developments and infrastructure plans are timed to this major event.
And finally, the fifth reliable sign of a Dubai housing prices stabilization is its economy diversification, which at present is not dependent on the fluctuations in oil prices, the expert said.