Dubai’s real estate correction will be brief and strong returns will return as early as next year.
- Dubai’s period of stabilisation will be brief and long-term growth should be expected
- Strong economic performance and sensible cooling measures will steer the real estate market’s trajectory
- Many executives are currently considering making further purchases in Dubai
Dubai real estate’s period of stabilisation is expected to be short, with the markets returning to growth by as early as next year.
Over the past 24 months, the emirate has been the world’s top-performing property markets with investors achieving capital appreciation of over 30%.
As returns have slowed so far this year, many had been worried about a major correction, but 84% of 200 business executives think real estate prices will not fall to the extent they did in 2008-9.
Most experts believe the cooling measures imposed on the market by the authorities will provide a great platform for long-term growth. These include greater restrictions on real estate supply and tighter eligibility for home finance loans.
Joao Cocco, Professor of Finance at London Business School, which conducted the survey, said: “The vast majority of executives surveyed do not believe that there will be a drastic decline in residential real estate prices in Dubai over the next 12 months.”
In fact now could be the ideal time to invest in Dubai property as half of the executives said they would purchase property in the emirate, with a strong economic outlook cited as the main reason for expecting future growth.
Dubai’s population is growing consistently. There were more than 200,000 job permits issued in first three months of this year and it is likely a similar number will be recorded in the second quarter. This level of expansion is set to be underpinned by the prospect of the World Expo, held in Dubai in 2020.
Other reasons for further investment included the high rental yields available in parts of Dubai such as Business Bay and the Marina as well as the quality of life in the UAE.