The international news agency Reuters recalled the crisis in the Dubai real estate market in 2008 and asked experts about the likelihood of its recurrence in the near future.
Ronan Hannan, director of the Proven Partners consulting company: “Dubai’s vulnerability to correction lies in its dependence on foreign capital, especially from China and Russia.”
“In the first quarter of 2023, Russians were the largest buyers of housing, but dropped to third place, they were overtaken by Indians and Britons. Even if the demand is from If Russia shrinks, then Egypt, Lebanon, Pakistan and Turkey will grow and stabilize the market,” said Hakim Abdeljawad, managing director of Kroll‘s Valuation Advisory Services agency.
Knight Frank expects prices to rise in premium areas: “House prices in Palm Jumeirah, Emirates Hills and Jumeirah Bay Island will increase by 5% in 2024. Apartments and houses outside these super-expensive areas will rise in price by 3.5% in 2024.”
A senior representative of one of Dubai’s major developers predicts a downturn. The cost of the facilities may decrease by 10-15% over the next few years.
Another source close to the situation said that at least one major local landlord is trying to sell several hotel properties, including one in the luxury resort of Palm Jumeirah, in order to
reduce the risks to your portfolio.
Meanwhile, according to forecasts, over the next six years, only 13 thousand properties will be rented in Dubai annually, which is significantly lower than the figure of 30 thousand properties over the past 15 years, which suggests a shortage that can support demand, said Faisal Durrani— partner at Knight Frank agency and head of sales in the Middle East and North Africa.
Summing up, analysts note that the risks of a new crisis are minimal, because all developers and financial institutions have learned lessons from the previous crisis and are “well prepared”. In addition, Dubai’s economic indicators remain high: Dubai’s non-resource enterprises are in the process of active expansion.
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