Dubai Property Forecast

Summary: The short to medium term Dubai property forecast is good for investors who have already bought, attractive for real estate investors about to enter the market and expensive for those seeking rental property right now!

The short to medium term Dubai property forecast is good for investors who have already bought, attractive for real estate investors about to enter the market and expensive for those seeking rental property right now!

As Dubai is one of the newest, hottest and most attractive investment property markets in the world currently and because Dubai attracts record numbers of new citizens month on month, the demand for rental and re-sale property in Dubai right now is massive but the supply of real estate is falling way below this demand and this particular trend is set to continue until at least 2007.

Obviously any property market is driven by the forces of supply and demand and Dubai is a unique example of how these forces directly affect property and rental prices.  16,000 new residents arrived in Dubai in the first three months of 2005 causing demand for property to surge.  With the likes of the Dubai International Financial Centre barely populated with employees yet, the numbers of new residents is expected to continue rising until at least 2007 and the demand for rental and completed re-sale properties will rise proportionally.  As a direct result of these factors rental prices across Dubai have risen by on average 40% in the first 6 months of 2005 alone, and the prices for completed re-sale properties are sky-rocketing.

If you’re already lucky enough to have made the move into the property market in Dubai and have secured either housing for yourself or real estate for rental income you are likely to be reaping dividends.  For those unlucky enough to be on the hunt for decent rental accommodation in Dubai right now, prices are already very high and are set to continue to rise.

There is massive development underway across Dubai and housing units are springing up all the time, but the majority of the required property will not be completed and available for occupation until at least the very end of 2006 meaning that as demand continues to outstrip supply the property forecast is for higher rental and re-sale property prices.

It is estimated that there are around 84,000 property units in development at the moment and that when these come onto the market as completed and ready for occupation, the discrepancy between supply and demand will be cease to exist and this will result in a slowing down of the entire property market in Dubai.  This situation is not expected until at least 2007 however, so for investors wondering how far the market in Dubai has left to run they can expect good strong returns until at least 2007.

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