Economic Highlights of the Dubai Property Market
The economy in Dubai is staggering. In 2007 GDP was registered at 54.3 billion US dollars and over the past 7 years, the economic growth was 18% Compounded Annual Growth Rate. Amazingly, the tourism, real estate and finance sectors are taking over as the main economic areas which used to be oil.
Growth of the population is detrimental to the growth of the economy. Between 2003 and 2007, the population created an 8% Compounded Annual Growth Rate which is sure to be logged down as higher as there are now an estimated 1.6 billion inhabitants in Dubai. This is predicted to increase to 2.2 billion by the year 2010. The Dubai property boom is going to be required with an increase in population such as that although it has been said that this should be capped to avoid saturation which is all too common in a situation like this.
It is the diversification of the economic sectors and their growth that has created a strong economy in Dubai. This diversification has attracted Westerners to move to Dubai especially to the finance and tourism businesses. Dubai is becoming a world centre for finance institutions due to its specially designated business communities. These purpose-built mini cities such as Business Bay are making Dubai a recognized global commercial and business center. Business Bay for example is spread over an area of 64 million square feet with numerous landmark towers within.
To entice white collar workers and tourism specialists into Dubai, the regulations for entry have been changed. They have been reduced making it easier to live and work in Dubai. This has then affected the Dubai property market in a way that there are now a greater number of investors selling houses on the owner occupier basis and not for rent. This of course suits Westerners who are very keen on purchase and not rent. The stature of the workers entering Dubai is also shown by the high numbers of luxury Dubai properties. The high-income section of Dubai is most definitely the largest. The developers of the higher end Dubai property structures are seeing a greater occupancy rate too.
So, to conclude, it appears that in terms of the Dubai property market, luxury is the way forward in the current economic crisis.
