3 Reasons Why Dubai is BOOMING
The property market in Dubai has now entered an aggressive growth phase with prices rising every month. The underlying causes for this can be summarized as being due to 3 main reasons:-
-Dubai Population Growth
-Big Increase in Tourism
-Return in Confidence
These 3 reasons are explored further:-
Out of the current 7.1 million population of the UAE, Dubai account for about 30% (2.1 million) and is the largest Emirate by population. Although Abu Dhabi is physically much larger, it accounts for only about 25% of the UAE population. The remaining 5 Emirates account for the rest of the population.
Over 80% of the population of the UAE is non-Emirati – ie. From overseas and this figure is set to become almost 85% as most of the growth is due to immigration from other countries. Thus less than 15% of the people in the UAE will be the local Arabs (Emiratis).
The biggest future forecast growth is within Dubai where the population will increase by 50% within 4 years and will DOUBLE within 7 years.
Last year, about 8 months ago, we told you that the 2nd Dubai Property Boom had started and we were the first company to tell you this.
At the time we expected property prices to rise fairly quickly over the next few years back to peak 2008 levels and then go beyond these before slowing down. This indeed is happening! Prices are now rising every month.
But Will it be another Boom and then Bust? Continue reading
You will remember in our “Dubai Property News” bulletin in April 2012 that we predicted significant price increases due to supply/demand we were seeing first hand in the property market (despite the corporate ‘analysts’ at the time still predicting further price reductions – their information is always out of date)
Our belief now is that the 2nd Dubai Property Boom HAS Started. And please remember – We told you this first!
Following the price crash which happened over one year ago at the end of 2008, many are wondering if Dubai will ever recover.
Now at the beginning of 2010, Dubai prices are rock-bottom and there many different views as to what is likely to happen. One view envisages Dubai prices remaining low for 2 to 3 years before a recovery that would see prices gradually returning to the peak 2008 levels by 2015. This is summarized in the chart below and is the most likely outcome in our view.
However, others think that recovery may actually start at the end of this year with prices growing again in 2011. Generally most forecasters do not envisage prices going down even further from the current very low levels.
Dubai property prices have been rising ever since we have been involved with Dubai property. Whilst everyone is routinely warned that property prices in general can go down as well as up – no-one ever imagined that this would happen in Dubai (and that includes us).
From early 2003 to 2007, the Dubai property market has grown every year. Property prices increased 2.5 fold during this period with average annual increase of over 25%.
Over the 12 months from September 2007 until September 2008, property prices increased by over 40% due to intense demand from investors all over the world. Prices on off-plan property in neighbouring emirates such as Ajman and Ras-Al-Khaimah also increased by similar percentages.