Fundamentals of Dubai property are in top shape

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Dubai’s real estate market continues to lead the region in defining trends that then percolate to nearby markets. Let’s investigate these trends by looking at the macroeconomic picture – which delivers a more integrated and holistic view than what analyses predicated on market fluctuations.

Within the global economy, Dubai maintains its rank as an investment, lifestyle and residential destination. Our research shows the fundamental drivers that make Dubai an attractive destination have not changed. Dubai is still widely considered a safe haven with a secure investment environment driven by a robust regulatory framework. It is a hub for tourism and international travel and the Dubai government is extremely supportive with world-class, well-directed infrastructure programmes.

On the demand front, recent reports have suggested price drops in units, potentially linking them to cooling interest. But our analysis shows this isn’t the case at all. Prices aren’t dropping due to market movements. Rather, real estate developers have become far better at offering a diverse mix of developments at different price points to attract buyers across all categories. Dubai now boasts a more diversified real estate portfolio, which makes real estate more accessible to different investor preferences and consequently a more sustainable one too, attracting not only investors but the end-users who prefer to live in their owned home.

Demand for hotel apartments, and in fact for real estate in general, is also benefitting from the Expo 2020 boost. HSBC research has indicated that the Expo will create some 350,000 direct jobs, and perhaps up to one million indirect ones. All these people will need places to stay in the short term and to live long term.

While overall market indicators remain sound, competition has increased. With quite a few new developments coming up, customers have more to choose from. They are becoming discerning and want value for the money they spend – particularly in the premium market segment. Customers want a point of differentiation that adds lustre and helps investments make capital gains. They also look for exceptional quality in Tier A locations.

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