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Property boom is here to stay

The finding was one of a number of insights published by the Middle East Economic Digest (MEED) Dubai Residential Real Estate Report 2007.

MEED and external industry experts conducted the pioneering research into the Dubai property market over a two-year period using data and new figures that account for the emirate’s robust growth in recent years.

MEED research editor Angus Hindley said real estate would continue to play a vital role in Dubai’s growth and the report would help investors better understand the market.

“It is a lynchpin for the emirate’s economy, fuelling the construction boom and attracting billions of dollars to Dubai,” he said. “However, the relative immaturity of the market has made it difficult for businesses and investors to gain accurate data on the supply and demand trends.

“This report gets under the skin of the real estate sector, and addresses that information gap by providing a detailed assessment of the supply and demand outlook, taking into account each of the economic factors that will influence the real estate sector until the end of the decade and beyond.”

A statement on the report detailed a number of the research insights, including that the value of projects — planned or under way — in Dubai will total $310,000 million over the next decade, with nearly three quarters of that figure, $230,000 million, within the property sector. Despite the number of projects and high supply of residential property, the report found that demand would still be greater. “Although supply of residential properties is greater than ever and 175,000 new units will be available by 2010, the demand is set to outstrip this, with an estimated 181,000 units required by the end of the decade,” the statement said.

Construction has grown at an average of 32.7 per cent a year since 2001 and in 2006, it accounted for 12.7 per cent of the total GDP, up from 7.2 per cent in 2001. Averaging at 17.9 per cent since 2001, the economy of Dubai has been one of the best performing in the Gulf over the past five years — largely due to property development.

Real estate and business services have recorded an average growth of 25 per cent a year, driven mainly by government-empowered developers, such as Emaar Properties, Dubai Properties and Nakheel, and landmark projects like Downtown Dubai, Business Bay and the Palm Islands trilogy.

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