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Why is Dubai Booming Again – 3 Reasons

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:-

1.Dubai Population Growth

The Dubai authorities predict that Dubai’s population will increase over 10 per cent a year, reaching over 4 million by 2020. Over the next 4 years alone, the population is expected to Increase by 50%

 Dubai Population

1975       183,000

1985       370,800

1995       674,000

2005       1,204,000

2010       1,780,000

2013       2,106,000

2017       3,275,000 Forecast

2020       4,292,000 Forecast

Dubai and Abu Dhabi could be forced to revise population projections and increase investment in infrastructure, as projected population numbers for projects planned by developers are outstripping expectations.

 

2. Big Increase in Tourism

Dubai is becoming desirable as a safe holiday destination for many people all over the world. Tourism is further helped by the fact that Dubai has re-established itself as a worldwide hub. Many visitors travelling from East to West or vice versa now use Dubai as the stopping point and quite often spending a few days to a few weeks in Dubai. This effect is predicted to become even more prominent.

The current Dubai International Airport is destined to become the World’s busiest Airport by 2015 beating London Heathrow and reaching 75 million passengers per year.

Dubai airport targets 75m passengers by 2015 and become ‘world’s busiest and biggest’  – The National

The new Dubai World Central Airport at the other end of Dubai is still under construction and will have 6 operational runways and Double the capacity. The existing airport will also remain operational when the new one comes fully on-line.

 

3. Return in Confidence

The financial crisis in 2008 had a very negative effect on confidence with 60% drop in property prices. Now with the economy doing well (GDP 6%) and the above factors, there is a return in confidence which has resulted in property prices going up and these are now rising every month. Nobody can be certain about the levels of property growth,  but most analysts believe that prices on ‘ready’ properties will rise rapidly and exceed the 2008 peak levels before stabilizing and growing at a slower rate.

2 thoughts on “Why is Dubai Booming Again – 3 Reasons”

  1. Another reason could be speculation – People are buying because they think property prices are going to rise. However there is no underlying demand. When bad news happens then it comes crashing down again.

  2. Speculation was definitely the case in 2008. Prices on “virtual” non-existent properties were rising by 10% every month! However, now I think there is less to do with speculation and more with desirability. There is also demand as there is not that many properties that are actually ready to live in and population is definitely increasing.

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