With Dubai’s Expo 2020 just 5 years away, you may be wondering what impact this might have on the local housing market. The expo, among the world’s largest exhibitions, can greatly benefit the economy, particularly when it comes to the real estate sector – there will undeniably be a higher demand for more luxury and residential housing units, for instance.
2014’s Market Slowdown
Even though real estate in Dubai has experienced a mild, temporary slowdown since late 2014, this should not at all pose any concerns for expats looking to live or invest in Dubai. This slowdown is actually a healthy sign in the long run as it can alleviate “potential market overheating”.
This slowdown should also give the Dubai real estate market enough time to absorb the current supply channel, while at the same time alleviating any possible concerns about the possibility of market overheating.
A market that’s less volatile goes in favor of all stakeholders and should help developers plan out future pipelines that’s actually in sync with real-world demand. This positive trend will without a doubt prevent a bigger correction in future. On one hand, unit prices may very well go lower later this year, on the other, a well-balanced supply-demand for properties will eventually keep prices level.
It isn’t always easy to accurately forecast at what point the Dubai property market is going to stabilize, since economic indicators can be unpredictable.
A UK-based consultancy firm claimed earlier this year that Dubai property prices may go down by at least 5-10%.
The Big Picture: Next 5 Years and the Expo
The Dubai government has planned to upgrade the city in light of the upcoming Expo, by way of generous infrastructure spending and reeling in foreign investments in a variety of sectors, including real estate. This is going to provide a good pillar for market support up until the Expo finally arrives.
It is expected that Dubai will receive at least 25 million visitors and will be spending approximately 25 billion dirhams in total infrastructure investments – this should lead to thousands of job opportunities spurring up. Though, experts are quick to point out that if the Dubai Expo 2020 is to be successful, developers need to be ready with the mindset that housing projects must be affordable in order to hit the expected influx.
Last year, the government stated that the Expo 2020 infrastructure planning is on schedule, along with a target completion date for major construction activities – October 2019. This gives them an additional year to test readiness across systems, networks and technologies.
In 2014, real estate in Dubai received investments to the tune of 218 million dirhams from expats coming from over 140 nationalities. Affordable housing projects are indeed under construction, and Dubai is responding well to market demands; it aims to offer economically-priced residential housing to all-income foreign investors and expats.
A study was recently conducted on how affordable housing is in the Dubai property market: 50% households earn between 9,000 and 15,000 dirhams. New and affordable units are underway in order to meet expats’ income levels within this range.
A global real estate consultancy firm, JLL, has marked affordable Dubai rent prices to fall somewhere around 72,000 dirhams or less and sale prices around 790,000 dirhams or less. This is an indicator that the upcoming affordable housing units will be especially well-received by expats who are interested in cheaper rentals.
You can thank the Dubai 2020 Expo for these positive changes, and whether you’re looking to rent an affordable apartment in Discovery Gardens or invest in property in Arabian Ranches, always hire the expertise of a real estate agency that has an established track record in Dubai and the UAE.