Skip to content

Will Dubai’s Real Estate Market Learn from Past Mistakes?

February 15, 2014
Real Estate in Dubai

There are rumblings of a Dubai real estate bubble of late.

You may or may not have heard at this point about the speculation of another property bubble poised envelop real estate developments in Dubai. There are a few hard statistics surrounding the fact: housing prices leapt upwards of 20%, and rents increased around 17%. Even though prices aren’t expected to reach the incredible highs that they did last year, some have perceived their continued rise as a cause for concern, warning that the economy is still recovering from the disaster that was 2009.

But not all are seeing Dubai’s real estate situation as a red flag. Rory Jones of the Wall Street Journal reports, that JLL is arguing that Dubai, in fact, is not facing an inevitable bubble. JLL admits that while, the immense price jumps are unsustainable, investors won’t be so quick to make the same mistakes as last time. There’s a heightened sense of caution, and regulations are tighter and stricter than ever. Previously, supply and demand were seriously out of sync, and JLL says that measures are in place to prevent that from happening again.

Furthermore, there are quite a few huge developments being considered right now, including a massive, city-wide canal project. A huge benefit is that many of these projects will be mixed-use properties. On top of this, JLL is optimistic for a rise of investment sales in the hospitality sector.

But for what its all worth, there will not be very many institutionalized Western investors involved in the market. The risk outweighs the reward, and so the U.A.E. real estate market may turn to the money of cities like Singapore instead.

Advertisements
Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: