Despite concerns about a worldwide recession, the real estate market in Dubai will continue to flourish and develop. Timely measures by the Government of Dubai aimed at preserving market stability have been a key factor in facilitating this. This has led to increasing investor confidence surrounding Dubai’s real estate market, according to analysts.
Investors, millionaires, and high-net-worth individuals will continue to invest in Dubai’s real estate market. This is according to analysts, executives, and industry professionals who convey that Dubai has solidified its place as a major international center for business, tourism, and finance.
Analysts claim that the worldwide recessionary trend caused by the Russia-Ukraine conflict, increasing energy costs, and global inflation will not cause major disruption in Dubai’s real estate market. This is because investor-friendly laws such as new property advertising restrictions and extra transaction reporting obligations would help to maintain the strength of Dubai’s real estate market. Equally, visa changes and the ease of doing business in Dubai further support this too.
CONCERNS ON A MACROECONOMIC SCALE
Despite these geopolitical concerns, increasing global inflation, and oil prices, sales transactions in Dubai’s real estate market have flourished. They reached approximately AED 160 billion in the first eight months of this year.
With consistently strong investment pouring into Dubai’s real estate market, the market is projected to continue its upward trajectory. But experts warn of slower growth due to rising borrowing costs as major economies such as the United States, China, and Europe are on the brink of facing recessions.
Recent data from the PMI (Purchasing Managers Index) revealed a decline in economic activity in the US, Europe, and Asia. This is confirming worries that rising prices and the conflict in Ukraine may cause a global recession. The numbers present a dismal picture of the state of the world economy, with most central banks still concentrating on controlling inflation by hiking borrowing costs.
HOW DUBAI’S REAL ESTATE MARKET CAN FLOURISH DESPITE A LIKELY GLOBAL RECESSION
Even with the uncertain outlook ahead, Dubai’s progressive visa reforms, pro-business environment, and strong handling of the recent pandemic position the emirate in a strong position. A position that continues to place Dubai as a highly desirable and highly transparent location for real estate buyers both on a local and international scale.
At present, the supply-demand dynamics are moving towards a state of relative equilibrium. High transaction activity and growing occupancy levels are key to this. Yet, Dubai continues to be a desirable investment location. This is because buyers may select from an abundance of properties across entry points with property-linked visas. So, even though growth in Dubai’s real estate market is anticipated to slow down and stay steady, the attractive conditions it provides will continue luring in high net-worth individuals and international investors.
Dubai and the UAE overall have a solid position in the global economy, which will continue to foster goodwill and confidence. Yet, when paired with the agile and quick-thinking nature with which the UAE approaches the macroeconomic environment, Dubai can emerge stronger from adverse events like recessions.
