Dubai: Overseas investors were the first to head for the exit as soon as the first clouds of financial uncertainty appeared on the horizon in 2008. And they were among the first to try and muscle their way back into Dubai’s property market as soon as the headwinds turned favourable in 2011 and they realised they could make full use of the still depressed values.

Which leaves open the question — is the present upturn in the local property market built on funding that could conceivably leave at any stage in search of better returns?

Fadi Moussalli, regional director for the International Capital Group at Jones Lang LaSalle Mena, offers an emphatic “No!”. “It’s undeniable that the Arab region’s turbulence influenced Dubai’s property market in a positive manner; what it means is that there’s a sizeable base of recent investors from the wider region and the GCC who see in a Dubai property asset a longer term commitment,” said Moussalli. “The mix is much more subtle than was the case up to 2008.

Transparent

“In the meantime, Dubai’s realty has gained in maturity and has also moved up the curve in becoming more transparent, and that always goes well with investors.

“Though cycles are part and parcel of the real estate sector, the recent value gains in Dubai are not bubble-like. There’s a serious flight towards quality, either for new projects from developers with track-records or projects that are nearing completion. It also means that secondary stock or older properties have not been able to exert as much influence on value gains.”

Helen Tatham of Knight Frank reckons the overseas investor mix in local freehold will only increase. “[Local] developers are running roadshows around Europe, Asia and Africa to create more diversity in nationality [of buyers],” she said. “We are seeing more investment from Saudi Arabia than before and, of course, from the more troubled neighbouring countries.”

The GCC fund flow is not limited to residential, which is another major plus for the local property market in gaining additional depth. “GCC nationals are naturally investing in their own region and we see this particularly on a more commercial scale, such as purchasing hotels, commercial buildings, residential and land.”