Dubai wasn’t immune from the various economic crises that hit the world from the end of 2007 onwards.
As a result, it has recently gone through a period of some years of property price decline. That should not be unexpected and simply reflects the global interdependence of countries, cities and economies, in the modern world. The idea that any country or any economy can stand apart from major financial crises is no longer a credible concept.
However, recent surveys have shown that property prices are once again rising quickly in Dubai. What’s driving this?
There may be any number of factors including:
- signs of a global economic recovery, particularly in the United States and one or two European economies;
- a recognition of the fact that Dubai is strategically placed as a major hub of global trade and one which has an excellent infrastructure ready and capable of exploiting any sustained global recovery;
- a high quality of living and a safe living environment – something that will always be in demand for many expats seeking to sample another lifestyle;
- a confident government that has continued to invest in the city’s long-term development.
Of course, purchasing property is never entirely risk-free and financial crises can both come and go. However, it is clear that for many people, Dubai is once again a very interesting destination and that has to be good for the property markets there.
In fact, it is interesting to note that the authorities have recently taken steps in order to stop the property market overheating. That involves reducing the loan to value percentages of advances for property purchases and reducing that even further when people are considering a second or subsequent purchase.
That is a powerful sign not only of current real property price increases but also that the central bank authorities anticipate an on-going vibrant market place that needs to be controlled if bubbles are to be avoided.
There are many governments around the world who would wish to have similar worries about the property market and to need to be considering just how to stop it escalating further!
It is true that the future of this city is inevitably linked to the global economy and future of global trade.
Dubai has made its priority the achievement of global commercial hub status and it’s probably true to say that it has largely got there. Yet that inevitably means it is dependent upon the continuity of significant global economic activity and the on-going resurgence of several of the world’s major economic powers – notably the United States.
However, it seems relatively clear that after a period of uncertainty and a worry for property investors, the future in Dubai is once again looking rosy. Yes, the global indicators will be watched closely and no doubt graphs on screens will still occasionally be looked at a little apprehensively but if existing and forecast increases are continued, it looks as if property will become an attractive proposition again for many investors.