Positive prospects for property
Dubai's property market has definitely slowed down when compared to the rapid growth seen in 2013. However, instead of being a matter for concern, most analysts agree that this is a positive sign.
The slowdown in Dubai's real estate market gives the market time to absorb the existing supply pipeline, while alleviating concerns about the housing market potentially overheating, said Moody's Investors Service. "A less volatile market is beneficial for all stakeholders and will help developers plan their future pipelines in line with real demand while at the same time acting to dis-incentivise speculators from 'flipping' off-plan units in order to generate a quick gain."
With the market clearly maturing from focus on growth that resulted in the 2008 crash, Dubai Municipality is now looking into introducing an affordable housing quota for all new residential development. The measure is a regulatory step initiated by most developed countries, forcing builders to set aside a proportion of new building units (20-45%) as affordable homes for people who would, otherwise, be priced out of the market.
Investments that are pouring into the city are also more spread out when compared to earlier, which is a good sign for the market. Research carried out by the International Property Show 2015 found that each location is being valued on the basis of its own supply and demand fundamentals. This is a healthy sign for the industry because investments are being pumped into lesser known parts of the emirate as well.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. On one hand, Dubai is seeing a slowdown in growth. On the other, the emirate continues to attract investor attention and developers are pushing ahead with mega developments. The city is in a period of flux and it will be interesting to see the new image it sets for itself once it settles down.