Dubai real estate to see steady growth as more serious buyers invest in local markets

High-net-worth individuals are drawn to the city's world-class infrastructure, strategic geographic location, and innovative developments

Waheed Abbas

Published: Sun 30 Jun 2024, 1:16 PM

Last updated: Sun 30 Jun 2024, 10:08 PM

Dubai's real estate market has seen three cycles of growth so far. But it saw two boom-bust cycles – first during the 2008 global financial when the market crashed for the first time and again during the Covid-19 pandemic.

Following the three-and-a-half-year rally, industry players are confident that the market will not bust but see a slower and steady growth. This is because the industry now has more end-users and serious investors who are investing in the local market.

As the third growth cycle comes to an end, experts are confident that there will be no boom-bust again – thanks to key initiatives such as Escrow account, inflow of millionaires and end-users that have played a key role in bringing stability in the market.

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Experts in the industry say that property market has moved beyond the boom-bust cycles as it has now become a more mature and regulated sector.

“Dubai's real estate market has significantly evolved over the years, transitioning from the boom-bust cycles of the past to a more stabilised and sustainable growth trajectory. This maturity is driven by several factors, including implementation of stringent regulatory frameworks, enhanced transparency, and a strategic focus on long-term economic diversification,” said Hassan Hijazi, group CFO of Amwaj Development.

Hassan Hijazi

He also added that Dubai's appeal to a diverse range of investors has broadened. According to him, high-net-worth individuals, institutional investors, and expats alike are drawn to the city's world-class infrastructure, strategic geographic location, and innovative developments.

"The Expo 2020 legacy and various government initiatives, such as the Golden Visa programme, have also played a vital role in attracting and retaining investors, reinforcing Dubai's position as a global investment hub,” noted Hijazi.

Not artificial or a balloon

Imran Farooq, CEO of Samana Developers, said over the last five decades, Dubai has built its economic infrastructure and multi-national society so strong that it would be inaccurate to say that the city’s rise is “artificial or a balloon”.

“The city stands strong and tall on its foundations. Dubai has shown it to the world by successfully organising global events such as Dubai Expo 2020, UAE COP28, and its exemplary handling of the Covid-19 pandemic. It only makes sense that Dubai's real estate sector has matured enough and moved beyond the boom-and-bust cycle,” said Farooq.

Imran Farooq

Yogesh Bulchandani, founder and CEO of Sunrise Capital, said it’s clear to anyone who has seen the ups and downs of the sector that Dubai’s real estate market has shown exceptional resilience, defying predictions of a slowdown.

“While global property markets stutter, prices in Dubai are continuing to rise, signalling a break from the boom-and-bust cycles. The market’s strength is bolstered by buyers purchasing for occupancy, indicating the previously transient nature of Dubai is fading. Demand remains strong from Europe (and the UK), India, and South Asia, with an influx of wealthy investors and foreign buyers, leading to a more stable and mature real estate landscape in Dubai,” he underlined.

Yogesh Bulchandani

No drop in prices

Samana Developers’s CEO said he doesn’t see Dubai property prices dropping over the next five years because the returns it gives to investors are very attractive.

“We have seen a rise in the number of investors from Europe, CIS, and China. We see all of the market segments are in high demand. Higher prices mean the market is attractive for foreign institutional investors. It helps Dubai further strengthen its real estate sector and facilitate all stakeholders,” he added.

Cushion against market corrections

Dubai's relatively lower property prices compared to cities like Hong Kong, Singapore, and New York attract investors but don't guarantee immunity from fluctuations, according to Bulchandani.

“The current trend of sustained price increases might suggest maturity, but global economic interconnections and investor behaviour still pose risks of cyclical trends,” he stressed.

Meanwhile, Hassan Hijazi noted that the relatively lower property prices in Dubai compared to cities like Hong Kong, Singapore, and New York indeed provide a cushion against significant market corrections.

“This affordability, coupled with the city's continuous development, safety, quality of life and the government's proactive measures, makes the Dubai property market attractive to a wide range of investors and residents.

"Additionally, the proactive measures taken by the government to regulate supply and demand dynamics ensure market stability. While some price adjustments are natural in any real estate cycle, the inherent value proposition of Dubai's property market positions it well to avoid major corrections, ensuring sustained investor confidence and market resilience,” said Hijazi.

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