Dubai Property Market Rising Again on Back of Foreign Investment
Foreign investors continue to flock to Dubai in droves and are investing big money once again into the emirate’s property market.
Analysts and market watchers across the board are looking at the emirate as a brilliant investment opportunity and see it as a safe-haven for international money that is fleeing other nations due to the global economic downturn.
Dubai’s real estate sector which suffered a huge blow due to the financial crisis in 2008, is slowly getting back on the path of growth with investors looking to take advantage of cheap prices for prime real estate in the emirate.
Most of these investors are here for the long term and are seeking a safe haven for their money to protect it from the economic and stability problems in their home countries.
Indian citizens make up the majority of such investors and recent Dubai government statistics have revealed that the Indians have picked up the lion’s share of luxury apartments and properties.
This trend is due to the devaluation of the Indian Rupee and for many investors Dubai is the perfect safe haven from the ill effects of rupee depreciation.
However, Indians are not the only ones investing in luxury Dubai properties.
Russians, Pakistanis, Gulf Citizens and Asians too are investing in Dubai’s real estate sector in ever greater numbers.
Government statistics show that investors put in AED 28.3 billion into the real estate sector during the first six months of 2012, an increase of 36% from the same period last year.
All this investment in the property sector has helped speed up its recovery.
Real estate forms a highly important part of Dubai’s economy contributing 13% to the emirate’s gross domestic product in 2011.
A faster recovery of the sector will also help Dubai’s indebted government run institutions who had to restructure their massive debts with creditors in the wake of the financial crisis.
According to the Khaleej Times Farouk Soussa, Middle East economist at Citigroup in Dubai said:
“A lot of people in the Middle East, Russia, Pakistan, and the Asian subcontinent are looking for a safe haven.”
Adding further he said:
“Perceptions are that the real estate market has bottomed out. If you are looking for more long-term investment, the market in Dubai seems reasonable.”
Loic Pelichet, Dubai-based assistant vice-president for research at NBK Capital also was positive on the future prospects of the emirate’s property market.
“Dubai’s property market will improve, but gently. Not at the 40 per cent growth per quarter that we saw during the boom.”
The instability caused by the Arab Spring protests that engulfed many Middle Eastern and North African nations has also seen a massive influx of money into Dubai and the emirate’s property market is set to increase the pace of its recovery.