Dubai must build on its attractions

I think every single week I am asked the question; "When is all of this going to come to an end?"

It's fair to say that everyone has their own answers to this question. The pessimists would suggest that we are sitting on a bubble that is due to burst any day while the optimists will argue that it's all good in Dubai and we are safe for at least another ten years.

So what is the answer?

Well, I think it's important to look at the facts and the truth is that Dubai has changed the lives of many people. From labourers to professionals, most people come to Dubai to start a new life and in doing so; weigh the costs of moving here against the likely returns.

It's a relatively easy choice given that in Dubai there are no income taxes, the cost of labour is inexpensive, the weather is good, the cost of living is relatively low, the country is centrally located, the political system is sound and well revered and the industries are not overly regulated. Therefore, unless there is something tying a person to their home country, the move to Dubai requires nothing more than a certain amount of money and a bit of courage.

All of this has made Dubai so attractive to expatriates that when people move here and enjoy the benefits, others are motivated to do the same. With the Dubai population on the increase, the demand for property and with it, the price of property, is only likely to strengthen further.

As long as this formula remains, this trend should continue, perhaps at a slower pace than we have seen previously, but all the same, the market should continue to enjoy a relatively consistent rate of growth.

Future

However, it is important to remember that people move to Dubai to make a better life for themselves and their families, and there are some signs that this objective could be jeopardised.

In recent years; inflation has increased the cost of living at an alarming rate and as larger portions of salary are being spent on food and rent, some families have had to move in together. Saving money is becoming trickier these days and families are waiting years to enrol their children into schools.

Added to that, some residential areas are not developed with children or families in mind and the traffic situation causes some people to set off at 6am to make work on time. All of these elements detract from a healthy family life and are causing some people to re-evaluate their futures.

On the business front, the possibility of VAT being introduced, the introduction of trade unions, the rising cost of labour and materials, the restrictions being placed on labour visas and the looming threat of income tax is giving companies considering Dubai as an option, or already here, food for thought in terms of a long-term strategy.

At the end of the day, if businesses cannot see a bottom line that justifies their being here, they will look for alternative, more favourable locations.

In either scenario, a migration of people would impact the demand for property and in turn; its value.

However, the good news and the truth of the matter is that Dubai is a success story like no other and people continue to come here in bulk volumes. It is a city that has radically changed the lives of so many people and by maintaining sensitivity to the needs of its people; I am sure the good times will keep on rolling!

The writer is managing director of Better Homes.