A joint study conducted by Reidin and Global Capital Partners predicted that the increase in Dubai's budget by 12% will serve as an additional financial incentive for the emirate’s housing market stabilization.
Analysts predict that local housing market can return to the price growth at the end of this year due to expansionary budget.
The Reidin/Global Capital Partners report has revealed that there is a clear relationship between budget expenditures and real estate prices. This relationship became clear first in 2008 when the cuts in spending exacerbated the economic crisis in many industries, including real estate. This time it happens the other way around, experts claim.
The signs of growth return in real estate pricing are already evident: in areas with affordable housing, such as Discovery Gardens and International City, real estate prices not only stopped declining, but even showed some substantial increases. And this process will continue due to the emirate's population annual growth of around 5-7%.
Forecasts made by other consultancies support this theory. According to Robin Williamson, managing director, Deloitte Corporate Finance Limited, "Over the past 13 years Dubai has experienced development on a scale and to a standard like no other real estate market globally.”
"Despite the decline in average residential sales prices in Dubai during 2015, price growth over the last four years reflects a compound annual growth rate of 11.6 percent, which outperforms other leading global cities such as London, Paris and Singapore," Williamson added.
Besides, the market is being regulated: Deloitte estimates that in 2016 no more than 10,000 new housing units will enter the market instead of planed 40,000 units, which will also reduce the burden on the supply factor.