How Dubai avoided a new wave of crisis in the real estate market

How Dubai avoided a new wave of crisis in the real estate market

Dubai's real estate market has experienced three growth cycles. The market faced two significant downturns: first during the 2008 global financial crisis and again during the Covid-19 pandemic. However, industry experts are optimistic that the market will now see slower but steady growth, driven by more end-users and serious investors. As the third growth cycle concludes, experts believe that the market will avoid another boom-bust scenario, thanks to key initiatives like the Escrow account, the inflow of millionaires, and a higher number of end-users that have contributed to market stability. The real estate sector has matured and become more regulated, moving beyond the boom-bust cycles of the past.

Hassan Hijazi, Group CFO of Amwaj Development, noted that Dubai's real estate market has evolved into a more stabilized and sustainable sector. He attributed this maturity to stringent regulatory frameworks, enhanced transparency, and a strategic focus on long-term economic diversification. The city's appeal to a diverse range of investors, including high-net-worth individuals, institutional investors, and expats, is bolstered by its world-class infrastructure, strategic geographic location, and innovative developments. Government initiatives like the Golden Visa program and the legacy of Expo 2020 have also played a crucial role in attracting and retaining investors.

Imran Farooq, CEO of Samana Developers, emphasized that Dubai's strong economic infrastructure and multinational society ensure that the city's rise is not artificial. He highlighted Dubai's successful handling of global events like Expo 2020 and COP28 as evidence of the city's robust foundations. Farooq is confident that Dubai's real estate sector has matured beyond the boom-and-bust cycle.

Yogesh Bulchandani, founder and CEO of Sunrise Capital, observed that Dubai's real estate market has shown exceptional resilience, with prices continuing to rise despite global market fluctuations. The market's strength is supported by buyers purchasing for occupancy, indicating a shift away from the previously transient nature of Dubai. Strong demand from Europe, the UK, India, and South Asia, along with an influx of wealthy investors, has led to a more stable and mature real estate landscape.

Farooq also mentioned that he does not foresee a drop in Dubai property prices over the next five years, citing the attractive returns for investors. The market segments are in high demand, and higher prices are drawing foreign institutional investors, further strengthening Dubai's real estate sector.

Bulchandani noted that while Dubai's relatively lower property prices compared to cities like Hong Kong, Singapore, and New York attract investors, they do not guarantee immunity from market fluctuations. However, the city's continuous development, safety, quality of life, and proactive government measures make the Dubai property market appealing to a wide range of investors and residents. These factors, coupled with regulatory measures to balance supply and demand, ensure market stability and sustained investor confidence.

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