Dubai real estate set to defy global recession fear

Dubai real estate will continue to thrive and remain on growth path despite global recession fears as the government's timely actions to ensure stability in the market have boosted investor confidence, experts say.

Analysts, executives and industry experts said Dubai has cemented its position as a global business, tourism and financial hub and high net worth individuals, millionaires and investors will continue to invest in the property sector.

They said visa reforms, investor-friendly policies and ease of doing business will keep Dubai real estate market resilient and it will swiftly navigate through global recessionary trend in the wake of Russia-Ukraine crisis, rising energy cost and worldwide inflation.

Stability on cards

Haider Tuaima, director and head of Real Estate Research at ValuStrat, said the Dubai real estate market is likely heading towards stabilisation in the medium term and any negative sentiments could potentially accelerate this trend.

"Strategic decisions put into action by the government since 2019, balancing supply and boosting demand in addition to the 2040 urban plan and enhancing market transparency by openly sharing transactional data, all this helps drive the property market towards more healthy and sustainable growth," Tuaima told Khaleej Times.

The Dubai property market's sales transactions hit nearly Dh160 billion in first eight months of this year despite geopolitical tensions, higher worldwide inflation and oil prices. The market is expected to sustain the upward trend but experts warned of slower growth amid fear of recession in major economies such as the United States, China and Europe.

Latest PMI data indicated that economic activity weakened from the US to Europe and Asia, reinforcing concerns that soaring prices and the war in Ukraine will tip the world into a recession. The data paint a bleak picture for the global economy, with most central banks still focused on taming inflation by raising borrowing costs.

"Inevitably, it will have some impact. However, with Dubai cementing its position as a global business and tourism destination, various visa initiatives along with a range of properties catering to a wide spectrum of buyers, the impact is expected to be softened,"

Robert Thomas, head of Agency at real estate consultancy Core, told Khaleej Times.

Referring to positive catalysts, he said Dubai’s continuing positive handling of Covid, pro-business and tourism environment and ongoing visa reforms have made it an attractive proposition for both residents and international buyers.

"With strong transaction activity along with rising occupancy levels, the supply-demand dynamics is at a relative equilibrium. Furthermore, buyers have the option to choose from a wide array of products across entry points with property-linked visas, making Dubai a favourable investment destination," Thomas said.

Record sales

Ata Shobeiry, CEO at Zoom Property, said Dubai real estate will emerge stronger despite some challenges on global front.

"After a strong first-half performance and record-breaking sales in July and August, the Dubai property market is in a strong position to face the cahllenges posed by the global recession. The market, I believe, will remain stable in this regard and continue to attract foreign investors and HNWIs," Shobeiry told Khaleej Times.

"The reformed visa rules, investor-friendly policies, and the stability it offers to investors are some major factors that will drive the property market throughout the rest of 2022 and beyond," he said.

— muzaffarrizvi@khaleejtimes.com