Dubai Real Estate Industry
/Present Status and Characteristics
of The Market
Present Status and Characteristics of
The Market:
July 2007
Because of the lack of previous historical data relative
to Dubai real estate market, and because it is relatively
difficult to judge the market characteristics with less
than circa five years historical data, any assessment
of the present situation is a combination of facts
and guesstimates as very few hard data can be
obtained even now.
The supply and demand in the Dubai real estate market
has been pretty much at the same level, and we have yet
to feel a significant gap between the
two trends.
As it has turned out, the demand side
has been predominantly made of short to mid term investors
seeking rapid return on investment dependant on their
available resources (i.e. the more resources available
the longer he is willing to wait and visa versa).
Therefore in a sense the demand side has been hollow,
while the supply side for the most part has been pure
commitments that have not kept pace with reality.
These two elements on the supply and demand side will
play a key role in projecting the market trend during
2007 – 2008.
Having a great deal of investors, who were willing
to grab the promised commitments on the supply side, was
a saving grace for the market as there
was not enough end users to do the same during the last
three years.
However the most crucial period for
the market will be the next two years, since most deliveries
must take place during 2007 – 2008, and most of
the short to mid term investors have already reaped the
profits, as their properties have almost maxed out their
appreciation.
Because the investors may no longer be willing to hold
on to their properties, they might tend to sell in droves
at the first available opportunity; Which means the market
now needs the end users to buy those
properties and move in. This fact is actually reflected
through the present market characteristics, which is increasingly
leaning towards a buyers market in which the end user
tries to evaluate and qualify the quality, commitments,
and the maintenance before making any decisions.
The question remains; at what pace the numbers of investors
will decrease relative to the proportion they will be
replaced by end users; if the latter overtakes the former
then the market will continue to grow. We shall analyse
the situation & try to project the outcome in Dubai
Out Look.
