I am often approached by international investors who shy away from Dubai. Reasons range from the region is too unstable to Dubai has built too many properties for any meaningful capital growth.

I have just returned from Dubai and seen for myself what I always new these investors are wrong.

It is true that by 2010 the number of homes in the region is set to double to 530,000. The commercial sector is also expanding at a rapid rate with office space set to triple.

However when you look closer to how the properties are being bought you will soon find that much of the real estate being bought is with hard cash. Financing is only now getting in on the act. My office in Dubai estimate that 80% of off plan property is bought with cash. This means that unlike the majority of housing markets Dubai resilience to market changes is second to none.

Nakheel the government backed property developer Chief Executive Chris O'Donnell was quoted as saying

‘People do get a little concerned about Dubai, thinking we are just building and hoping we will sell the product on completion. But we sell product prior to starting construction. Everything you see at Palm Jumeriah has been sold"

Property Developers Dubai Properties Chief Executive Mohammed Binbrek "We do not begin until the units are sold and then we ask for a 70% deposit." When asks if he thought the Dubai market would crash with so much construction he replied " Around 40% of the population is under 20 add this factor to a population that is growing it implies much more houses.

Dubai investment in the infrastructure is enormous from a new airport that will rival Heathrow to freehold zones that are attracting international investors the region is serious about development and its future. Dubai will be the leisure, sporting and business centre of the Middle East.


Dubai is a safe place to live with low crime rates and a reputation as being an oasis of tranquility in the region. It has a more relaxed feeling of live and let live. The majority of its 1.5 million population are in fact expats and the government want foreigners to stay with residency visas issued on the purchase of freehold property.


Big business is there already and the employees have followed and a lot more are set to come to Dubai.

This happen in all markets from time to time. Inevitable as far as I can see. You get every developer and his uncle jumping on the bandwagon of a good thing...and why not.

The great thing about Dubai is it has more than just vacation property to offer so even in a tighter market it has other facets to bring on board. The rulers have clearly thought about the issues of a dead market with its long term detriments.

Personally I have no issues with the oversupply over time. Short term flippers may suffer.

Paul
International Property Directory

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Gulf News is saying here in a recent article quoting various Industry Players that Demand for residential units in Dubai is expected to outstrip supply until at least the turn of the decade, making chances of a price correction appear slim.

DEWA in another recent Gulf News article concede they are struggling to keep up supplying infrastructure. DEWA is behind the ball playing catch up with the supply of power and water considerd one of the biggest challenges facing Dubai's real-estate sector according to Peter Riddoch, chief executive officer of Damac Properties (UAE's largest privately-owned property developer)

Research your investment, fundamentals of location, delivery date and quality of the finished product combine together to determine what capital gain will be realized. You can still get your fingers burnt buying property in Dubai however the recently introduced property Law no 8 will go along way in enhancing Future Investor Confidence.

oversupply not yet

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The oversupply is a fact
Most of the properties adverts in the local newspaper are available
BUT
The prices are still going up and will take a year until something is going to happen
BUT
The government will come up with a solution and the oversupply will disappear
BUT
This is going to happen only once and than the reality will be Market crash

Most probably late 2009

Too much too quick

IMHO there's no oversupply in Dubai, and no market crash for years/decades to come.... if not FOREVER!!!
All the land is owned by the government, and therefore supply and demand is being controlled accordingly!

Oversupply is there for sure in terms of availability in 2010.I am in dubai and I see 200 % construction going on in every field of life than what is available at present.you take any exmaple;Malls , they are going to multiply the shoppig malls by almost double in a year.public transport , they are going to double in 2 years,airport is coming up which is claimed to be of heathrow standards.offices , residents are countless projects . roads , rails marine transport everything is done just to claim the biggest and the highest in the world ; sports facilities, they are building worlds first purpose built sports city.I am really thinking about all these amount of construction will get their required power supply when operational.I heard very little from DEWA(dubai electricity and water authority)

Supply will be much more than today and that's of course a reality. The more time passes, the more buildings are completed, and then supply adds. However, I thought you meant that "oversupply" such as "more supply than demand", and that's where i disagree.
The amount of jobs availability will eventually soar simultaneously. The same will apply to the number of tourists/ visitors.

I hope and wish that you are right,but it does not look like that.Over supply means more supply then demand.and at one point saturation will come.when it will come noone knows.

Regards to whether there will be oversupply.Not quite sure where all these jobs will come from.Dubailand should create many with the entertainment complexes but so far nothing much is happening on that front.Most of whats going up there is residential.Silicon Oasis is again very quite with regards to new businesses.I read about all these towers going up in business bay and wonder who will occupy them?
As a developer its irrelevant whether your finished project is half empty because no-one wants to rent the other half.As far as your concerned thats the owners problem because the developer would have had his money.Once Dubais building boom is over and theres nowhere left to build these developers will move on to other places to build.