Stock Dubai property Palm
Watch out for some heavy Chinese investment flows into Dubai's property market. That could be where the next round of demand upturns will come from. Image Credit: Dubai Media Office

I recently had the pleasure of exchanging ideas with a number of investors and entrepreneurs anxious about a potential recession in the West. Investment concerns have also been voiced in relation to Dubai, giving rise to doubts in the minds of many.

My conversations with these stakeholders have prompted me to conduct extensive deliberations so that we could set the record straight.

While some economists’ projections make sense from a global perspective, Dubai’s real estate figures do not reflect the same sentiment. In fact, the evidence suggests that the city’s real estate industry has been thriving—properties continue to be red-hot and investments are on the rise.

A ‘recession-proof’ city

Despite anxieties surrounding a potential global recession, one anomaly stands out: Dubai. This incredibly prosperous city appears to be recession-proof, having been largely insulated from the economic turmoil that has affected other parts of the world in recent times. With exciting development and infrastructure projects in the works such as District 2020 and Palm Jebel Ali, and ever-expanding opportunities for foreign investment and employment, Dubai continues to attract attention even in financially uncertain times.

Far from being hindered by economic hardship, it is plainly testament to its resilience that Dubai ranks amongst the most vibrant, dynamic cities when international economies are in decline.

Major developers out of stock

The real estate market is seeing an unexpected surge in demand—even to a degree that has caught major developers off guard. The UAE’s real estate sector is in a state of flux as major developers find themselves running out of stock.

This is a trend that has been gathering pace over the past year or so. With no inventory left and prices going up on the secondary market, it looks like this surge will be more than just a short-term trend.

Dubai’s population hits new high

In 2022, Dubai’s population soared to over 3.55 million, a 2.1 per cent increase from 2021. This monumental growth brings with it an unprecedented need for properties. The population growth is no small feat considering the number of people had already been steadily increasing for years, making this milestone even more historic.

It comes as no surprise that many of these newcomers are attracted to Dubai’s booming economy, bustling way of life, as well as its unique mix of urban culture, entertainment, and glamour.

Record-breaking rental yields

Dubai continues to break real estate records. Today, rental yields across key areas in the metropolis exceed 10 per cent - high compared to global averages. International investors have been flocking to the city in droves due to its highly attractive RoI, which looks set to remain buoyant in the foreseeable future.

With the real estate sector receiving a healthy dose of investment from both local and foreign interests, Dubai is presented with a unique and promising opportunity for further economic growth and prosperity.

Record company formations

Since the announcement of full ownership rights for international companies in Dubai, the number of company formations has skyrocketed. This is only natural, as the city offers a favorable climate for operating a business and an attractive financial incentive package.

With much lower taxes than in other cities, a wide range of options for incorporation and investment vehicles, world-class infrastructure and strong government support for international business initiatives, it’s easy to understand why there has been such an observable uptick in corporate registrations.

Chinese investors currently in hibernation

The full force of Chinese investors in Dubai’s property sector is yet to be seen. Chinese investors were among Dubai’s largest sources of real estate capital before the pandemic struck; and they may soon ignite an exciting new wave of investment activity as Covid measures are phased out in China.

It seems that Dubai is well-positioned to weather any storms. The city has always been proactive in its approach to diversifying its economy and protecting against sudden shocks. With strong indicators suggesting continued growth and expansion, it appears that Dubai is poised for yet another period of sustained success.