We are now more than half-way through 2016 and the outlook for Dubai’s property market which was beset with gloom at the start of the year seems to be changing for the better. While some of the contributing factors like depressed oil prices and a flat job market continue to persist, industry data indicates a gradual change in investor sentiments with positive changes in price data at select locations signaling a changing tide.
However a certain section of industry experts and analysts persist in propagating a negative scenario for Dubai’s realty market – a trend that is causing a lot of confusion among some potential investors who now appear to be uncertain about what lies ahead.
Here’s a look at the prevailing situation of select fundamental factors that can help investors take an educated decision with regard to their decision to invest in Dubai’s property market.
There is a prevailing argument here that renting is likely to become more difficult in the run up to September mainly due the academic school year and rising number of job cuts. While this might sound logical, it fails to consider new employment opportunities being simultaneously created in other sectors that remain relatively unaffected by the ongoing slowdown.
While the volume of new jobs being created might seem insignificant, what’s important is the fact that it appears to be sustainable especially at the mid-income level which is likely to push demand for rental homes.
While mid-income housing continues to attract many takers, it’s the premium segment that seems to have been impacted adversely across both off-plan and ready-to-move projects. Experts attribute this trend that can be traced back to late 2013 to a variety of factors including overvaluation and an oversupply of projects.
However the market seems to have adjusted to the changing dynamics with many developers opting to moderate the supply of new projects. The handsome discounts being offered currently are an added lure with many end users opting to invest in such projects creating hope for renewed demand going forward.
The impact of external factors like the slump in oil prices, fluid global economic scenario and a subdued job market have certainly left their indelible mark on the fortunes of Dubai’s realty. However the thumb rule of investing states that it’s always more profitable to invest when the chips are down. In other words, greater the market volatility better the chances for higher returns.
Both investors and end users need to grab the opportunity and invest in projects that offer the best value for their money and the chance to earn attractive returns in the future.
The bottom line here is that Dubai’s realty market still has a lot to offer to the prudent investor and end user. While a few analysts may choose to paint a doomsday scenario citing the layoffs and oil price slump as the main culprits, it’s a little too premature to call it a recession without first balancing the long term impact of such factors with Dubai’s undisputable position as a proven and preferred destination for realty investors.
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