Investors turn focus on to realty
Real estate is now considered a sound investment in Dubai. This marks a significant change in investor sentiment, which is generally on an upward trend when it comes to the stabilising property market in the Emirates.
Undoubtedly, the market cannot be left unaffected by changes in the economy. In fact, 88% of investment professionals in the Middle East agreed that the fall in oil prices was not beneficial to the sustainability of the UAE economy. Couple that with the fact that the UAE's property market has been stabilising over the past six months, there is hesitation on the part of investors.
However, this also means that many foreign investors have been priced out of Dubai, according to Jesse Downs, managing director, Phidar Advisory. "The remaining investors are purchasing based on sustainable, dividend-driven investment strategies. And this benefits us all." According to him, by reducing the risk of speculation, Dubai can return to a more sustainable trajectory of economic growth. "Stable and predictable rents may make boring headlines, but do achieve the primary purpose of property - facilitate growth of the entire economy, not just one sector."
At the same time, Dubai's developers are not easing up on the market, continuing to roll out one spectacular project after another. Now, work is set to commence on Aladdin City - a series of towers and bridges that will be reminiscent of the famous children's tale. "The project aims to [build] icons of legends of the past," according to Dubai Municipality Director General Hussein Lootah. The project is waiting to be registered with the Unesco World Heritage committee.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. If one trend is emerging, it's the maturing of the real estate market. Now, the sector is understanding its role in the Dubai economy. Rather than focusing on instant growth of just one sector, there is growing awareness that stability is what will pave the way forward.