Despite a slowdown in rental increases across the city, investors continue to be drawn in to the real estate offerings put up by Dubai developers.
A recent survey put the UAE on the map with China with 94% of investors bullish about reaching their financial goals. What are these goals? Well, according to 25% of investors surveyed, it is buying a new home. “The UAE continues to benefit from its long-standing policy of diversification away from oil. It has shown remarkable development as a tourism destination, a trade hub and a financial centre. There are also encouraging signs of regulatory reform, including the recently announced Companies Law, which will facilitate further IPO activity,” said Bassel Khatoun, head of Mena Equity at Franklin Templeton Investments.
The slowdown is not here to stay, says one real estate expert in the city. Dubai’s real estate market will return to normal by the end of 2015 after a subdued past six months, according to the founder and chairman of developer Sohba Group PNC Menon. He said the developer had based prices for its new Mohammed Bin Rashid Al Maktoum City - District One project – a joint venture with Meydan racecourse – on the current flat market conditions. “Prices are driven by market dynamics not by the developer, and the developer designs around that,” he said. “However, my view is that by the end of the year the market will be back to normal. I think we will announce phases three and four by then.”
Developers are clearly seeing a demand for new real estate since they have not put a pause on any of their new developments. Emaar has just announced it would be spending an initial AED10 billion on its beachfront development in Al Mamzar. If anything, the slowdown has left the Dubai property market stronger than ever by boosting investor confidence that there is no danger of another property bubble.