“If you have any plans of buying a property in Dubai, then better book your property before it is too late.” This is the advice that Dubai real estate investors got in mid-January. The same article added that Dubai’s property market was “on the pick” and predicted that prices would go up 25 percent over the next four years. Dubai is one of the world’s youngest real estate markets and has experienced phenomenal growth in all areas of the economy. There are many factors that contribute to Dubai’s property prices, but the overall performance of the economy is responsible for the spectacular appreciation of Dubai properties.
In the future, we can expect an even faster appreciation of the value of the property for sale in Dubai. The main factors driving the current high value of the city’s properties include: stable economy, a free trade environment, excellent employment prospects and a growing middle class. The major economic indicators all point to continued healthy growth in the near future. As long as these favorable indicators continue, we can expect a sharp increase in property prices in Dubai in the coming years. This will be an exciting time for all property investors in the region.
But, will this time be “better” than the past? The past two decades in the city of Dubai were marked by rapid growth and development. Between 1996 and 2021, the city saw real estate development equal to more than six percent per year. The rapid rate of development contributed to a significant surge in demand for real estate in Dubai. This increased demand combined with lower supply reduced prices of property for rent in Dubai.
Today, the situation is not quite as rosy. Dubai’s economy is suffering from low interest rates, rising unemployment, and a large stock market crash. All these factors combined with global insecurity have led to a slowdown in the buying and selling of property. What’s more, the lack of investment opportunities in the city has led property prices to slump over the past year.
So, is the situation in Dubai going to change in the next few years? The answer is, most experts are expecting a slow but steady rise in property prices across the region. The main factors that contribute to this prediction include high unemployment, declining tourism, and increasing restrictions on foreign ownership of commercial properties. Beyond this, factors like natural resource exploitation, climate changes, and political instability are also expected to affect the buying trends in the coming years. The likelihood of a correction in the trend is remote at this point in time.
Will Dubai’s economy grow in the future? The short answer is – probably. Tourism is one of the main drivers of Dubai’s economic growth, and the city’s free trade agreement with other countries, such as the United Arab Emirates, benefits the general population by allowing them to purchase goods and services from other nations for less than they would in their home country. On the other hand, while no official numbers are available, thousands of local and international tourists visit Dubai each year. Tourism certainly isn’t a guaranteed way to generate more revenue for the city, but it is one of the main factors that keeps it growing.
Will Dubai property prices keep rising? The answer is – most analysts predict that they will. The fall in oil prices, combined with rising supply, will have a negative impact on the price of new construction projects, which are a key driver of demand. However, once the market begins to pick up, the price of real estate will increase to more than double its current value. That will certainly provide a nice return for those investors who have bought into the property market during the boom.
Will Dubai still be a popular holiday destination in the future? It was one of the first global cities to open its arms to the tourist industry, and many of the world’s hot spots can be found here. With an influx of expats, the mix of culture and history will remain a drawcard for visitors. A booming tourism industry and constant trade with other nations will help the city maintain its reputation as a leader in leisure activity. Even if property prices start to rise again, it won’t be as steep as they have been in recent years and a Dubai holiday should prove to be a great investment.