Economic Development and Its Impact on Real Estate Prices in Dubai
Introduction
Beyond the Basics: The Reasons for Dubai’s Real Estate Market Attraction
Dubai is today one of the most prestigious global cities in terms of property investment, easily associated with luxury standards and phenomenal growth rates. However, what propels the increase in property prices in this progressively developed city? The answer is to be found in the high economic growth rate, which the emirate of Dubai has been experiencing for years. Here, in this blog, we will be looking at economic growth and its influence on the real estate prices in Dubai and provide the necessary information for investors.
Appreciating the Relationship between Economic Development and the Real Estate sector
Due to the new economy Dubai had experienced a complete metamorphosis right from being an economy that relied on oil export to being a modern cosmopolitan city that is enhancing the global trade and commerce, tourism and hospitality, finance and technology. Economic diversification has encouraged the growth in population, attracted more foreign investors and improvement in the infrastructure – these are the key determinants of cost of real estate.
Things That Contribute to Cost of Houses in Dubai
- Population Growth: The Demand Surge
In its course, however, as the economy of Dubai grows, the population of the city also increases. As more and more expatriates and professionals relocate or look for new job opportunities, there is more demand for units for living in, which drives the price upward, all the more so in some of the prime locations such as Downtown Dubai or Dubai Marina.
- Foreign Investment: Global Magnet
This modern city-capital offers numerous facilities that can attract foreign investors: Situated in the prospective region, Dubai boasts an almost incredible developed infrastructure and carries out business-friendly policies. International purchasers for their part have been major players fueling the growth of house prices especially in the premium segment.External Link: To get more information about foreign investments in Dubai, click on this useful source.
- Tourism and Infrastructure Development: The Construction of Tomorrow
Dubai has rapidly emerged as one of the fastest growing tourism destinations in the whole world. Appealed by the city’s aggressive infrastructural plans and projects that include the Dubai Metro line and projects around Dubai South, the real estate market is on an upward trajectory.
The Stabilizing Factors for the Market: The Government’s Policies
Dubai also has a major influence in the real estate market to maintain the sustainable growth in the market. This can be through capping of mortgages, having particular regulations on foreign owned residential properties, and enhanced disclosure measures which are all meant to ensure that bubbles do not emerge.
Real Estate Market Segmentation: Home Based versus Business Related
- Residential Properties
Dubai’s residential market is fairly sensitive to economic expansion especially in the premium end of the market. Luxury districts such as Palm Jumeirah and Jumeirah Beach Residence (JBR) have experienced the new heightened task due to interest from end-users as well as investors.
- Commercial Properties
The market for commercial premises such as offices and other commercial units has strong relations to business considerations. Since Dubai is quickly becoming the province of international business, the need for quality commercial space for use in first-class areas such as DIFC and Business Bay remains high.
Challenges and Future Outlook
On the positive side, economic growth has led to the increase in real estate prices but the market faces several issues such as; Market saturation in some sub-markets/segments and, volatility globally in the global economy. But the promises of sustainable development of Dubai and opportunities in the region in combination with global investment capabilities ensure further development of the industry.
Company Spotlight
How Somi Finance Can Assist You With The Acquiring Of Properties In Dubai
At Somi Finance, we know the workings of Dubai’s property market perhaps better than most other companies do. We have carefully created investment tools for the people to enable them to participate in the booming economic liberalization course in their city while at the same encouraging them to remain sensitive to market risk and fluctuations. Whether you seek investments in apartments, offices, shops, malls and warehouses or reinvention of communities through development of residential, retail and business uses, Somi Finance will provide the guidance and support for your investment needs.
Conclusion
The next step for You in the Dubai Real Estate Business
The rapid growth of the economy in the Dubai region can be said to be a very strongly influencing factor as far as real estate price trends are concerned. To the investors it is essential to grasp this relation as a way to penetrate this efficiently developing market. When deciding on the next step, please bear in mind that at Somi Finance the necessary assistance and guides for achieving the goal are always at your disposal.
