Dubai has been something of a real estate magnet for some time now although the market itself has been volatile over the years. A report today confirms that GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE) are still keeping faith with Dubai real estate. If we look back to the start of the century Dubai was seen as a “safe haven” although in light of the US mortgage sector collapse the Dubai market eventually followed suit. While it has taken some time to build confidence and attract investors back to Dubai, it does seem to be on a more even keel these days.
Dubai is by far and away the most developed real estate sector across the GCC countries offering an array of different opportunities and different types of property. It is still classed as a “safe haven” by many GCC investors amid increased spending on infrastructure, the economy and confidence boosting regulations.
The Dubai Land Department has confirmed that outside of the UAE, Saudi Arabia is the largest investor in Dubai real estate. Saudi Arabia investors accounted for 3294 transactions worth a staggering DH 8 billion. Qatar and Kuwait were joint second investing DH 2 billion with Oman and Bahrain injecting an additional DH 1 billion into the Dubai real estate sector. While some Western investors seem to have concerns about the Dubai economy in the short term it seems as though GCC investors are quite happy to take a long-term approach.
Strong start to 2017
Those who follow the Dubai real estate market will be well aware it has made a strong start to 2017 with around DH 30 billion worth of transactions in the month of January alone. Despite warnings of benign short-term economic performance it seems many investors are prepared to look towards the medium and longer term for their capital appreciation. The cultural and religious connections between Dubai and GCC investors have also played a part and will likely do so for many years to come.
There is no doubt that the Dubai authorities have learned from the 2008 US mortgage crash which eventually pulled down the Dubai real estate market. After initially being seen as a “safe haven” the market came tumbling down and significant weaknesses in the financial system were laid bare. Since then we have seen the introduction of robust regulations, protections for investors and developers as well as a significant injection of capital into the economy. It did take some time but slowly investor confidence is returning although it has to be said that Western investors are not as strong buyers as those from GCC countries.
It seems as though GCC investors are prepared to look more long-term and perhaps overlook any short to medium term economic challenges. The Dubai property market is not expected to fall back too far but difficult worldwide conditions do not help. Even though many Western investors have ventured back to Dubai, after having their fingers burnt back in 2008, not all are confident about the regulatory structure going forward. However, there is no doubt that the area is more prepared today for any financial shocks in the future and slowly but surely Western investors will return to the Dubai real estate market.