Dubai Real Estate Industry /Dubai General Market Outlook - 2010
 
Dubai General Market Outlook - 2010:
 
There are 3 key elements that fuels Dubai property market:
 
  1. Economic Progression.
  2. Increase In Population (expatriates).
  3. Supply & Demand.
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Fortunately for Dubai, all 3 elements are in a right direction. Economy is performing at an impressive pace, population is doubling by 2010 and supply & demand are pretty much balancing each other out year after year, thus creating a mature & balanced market.
 
  • Dubai’s economy is the center of gravity for all activities, and real estate is an integral part of that progression.
  • The key to success for Dubai’s real estate industry is the growth in the economy and how much of the intended economic objectives materialize in the future.
  • The more successful the economy, the more expansion and steady growth for the industry. This is the real pre-requisite.
  • Incidentally, Dubai economic performance since 2000 has been remarkable, so much so that the majority of economic targets set for 2010 have already been overachieved by 2005. Therefore, the Government has now devised a new 10-Year Strategic Plan for 2015.
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Dubai's Major Economic Indicators - Per Capita GDP
  • Dubai’s economy is a phenomenon (not a bubble) that demonstrates its viability by the actual results it achieves, and its track record speaks for itself. It is a perpetual success.
  • The real GDP has grown at an impressive combined annual rate of 13.4%, higher than the economies of China & India.
  • GDP & Per Capita GDP have increased by 113% and 61% respectively since 2001, while the total non-oil trade has grown by more than 150%.
GDP Per Capita for the year 2005 - IMF
  • Dubai’s per capita GDP of US$ 31,140 is one of the tops 20 in the world, and by 2015 it will reach US$ 44,000.
Real GDP Growth Dubai vs International Benchmarks
  • Dubai GDP will reach US$ 108 billions by the year 2015, which is extremely high when considering that it is primarily a Non-Oil economy.
  • Dubai’s economy will reach its zenith in 4-9 years, after all major and mega projects have materialized and the required infrastructures are completely in place.
  • The ultimate growth in real estate industry depends directly on the real demand presented by real end-users, which in turn depends exclusively on the population growth that in turn depends primarily on the economic expansions & the available opportunities.
  • The tremendous growth in the real estate industry over the last three years relates directly to the growth in economic opportunities.
  • The property market in Dubai has seen a massive acceleration in recent years.
  • The property market situation in 2003-2004 was an artificial one with a lot of hypes; therefore, we should not and cannot compare the market today with conditions in those days.
  • The scale of the property development is unprecedented and Dubai property industry feeds off the economic growth, and what this city/state has to offer to many divers investors around the world.
  • Dubai has achieved a 97.4% employment level, one of the highest in the world.
Dubai's Major Economic Indicators - Employment
  • Lenders (banks) are concerned with profitability. If the risk element is reduced, profits increase. The Land Law was a major concern for the mortgage industry. Its enactment will only help the momentum the banks were looking for.
  • The mortgage market in the UAE will exceed US$ 5.5 billion by the end of this year, and is set for greater growth. The mortgage industry has & will provide added acceleration to the real estate growth.
  • The demand for property in Dubai exists & is real, but it is a steady demand that grows proportionately with other elements. It cannot be forced or created artificially; otherwise, market will correct itself periodically.
  • On the demand side, continued inflow of expatriates serves as the biggest source of addressable market.
  • We should expect 30% of the annual increase in population to serve as the addressable market for the incoming supply of residential units.
  • Dubai’s population is expected to reach 2.3 millions by the year 2010, an increase of 900,000 from the existing 1.42 millions.
Expected-Population-Growth
 
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