At a time when the global financial system is bending under the weight of the crisis that developed on the basis of a falling mortgage market, the oil-rich Gulf countries continue to be actively built, erecting more and more new real estate projects. The international real estate exhibition Cityscape 2008, held in early October, broke another attendance record: the mood of its participants and guests was far from pessimistic.
We talked with the managing partner of Options Real Estate Lina Tarabai about the situation in Dubai's real estate market during the global credit crisis and the reasons for the future confidence among developers and realtors.
- Liina, it seems that Dubai is not particularly worried about what is happening today in the global real estate market…
- This is true: the crisis in the US and Europe markets only spurs the development of the Dubai market, as investors now feel more confident here than in traditional markets. Despite the fact that some points in the region are already experiencing the negative effects of the crisis, Dubai continues to develop and grow in the intended direction. Every day we are convinced of this: there has been practically no decrease in demand for real estate since the crisis began.
- That is, the crisis will not affect Dubai?
- According to analysts' forecasts, the Dubai real estate market will be actively developing for at least a dozen years, as the Dubai authorities have achieved incredible success in positioning the emirate as one of the top world tourist centers. It is also important that recently Dubai has strengthened its position as a business center. The crisis is a crisis, and people continue to travel and develop their business, which, of course, affects the stability of the real estate market.
The fact that the Dubai government is looking positively into the future is also confirmed by the fact that at the Cityscape 2008 real estate exhibition held in early October, two of its developers, Nakheel and the recently created Meraas Development, presented new projects.
The developer Nakheel, famous for its man-made "palm" islands, announced a project to build a new world record-holder skyscraper, 1 km high, and the adjacent buildings in a desert area. The total project cost exceeds US $ 38 billion!
And recently created developer Meraas Development announced the start of work on the Jumeirah Gardens project, which is estimated at US $ 95 billion. Also, a major Dubai-based developer Deyaar Development has launched the Deyaar Village project, an environmentally friendly development that will provide housing for at least 30,000 people. The numbers speak for themselves ...
- Some financial companies continue to warn that prices for Dubai real estate will fall after some large projects are commissioned ...
Such warnings and forecasts have been voiced for a long time, but as practice shows, they are not supported by real events. Many predicted that after the commissioning of Jumeirah Beach Residence and Dubai Marina, prices would fall. But they did not fall. Having screwed up, rose again.
Even during the month of Ramadan’s Muslim fasting, there was no traditional recession as before: this year investors were active during the fasting.
At the same time, the emirate’s leadership has the ability to track the flow of real estate on the market, thanks to the control over the allocation of land for development. We will not forget that in recent years, legislation has also changed for an incomparably better side. Add to this the security of living in Dubai. So all the facts that support stability in the market are obvious.
I don’t think that prices will fall next year, despite the fact that we expect the delivery of a sufficiently large number of objects: demand will continue to exceed supply for a long time to come. Prices may not rise, but they will not fall unambiguously.
- That is, do you think that investors in Dubai are not at risk now?
“Yes, I'm sure of that.” You can support global pessimism, but you can really look at things. The Emirates has a fairly stable financial situation. The real estate market is also stable. We expect that in the near future there will only be more investors, as they will look for opportunities that are not available in the countries where they live or do business because of the crisis.