Dubai is looking forward to long-term growth, with real estate booming after rapid recovery

Gulf Today, Staff Reporter

Dubai is accelerating to attract residents, investors and capital to stimulate long-term growth, supported by the rapid economic recovery it achieved after the Covid-19 pandemic.

The report stated the approach that the emirate seeks is to reuse a brilliant economic model that has focused for decades on real estate investment, tourism and foreign capital inflows. The real estate sector is booming again with the help of strong demand and more affordable residency rules. Analysts believe this time that there are more protection measures in the face of any recurrence of the problems of the global financial crisis in 2008.

Ambitious new goals

Home to the world's tallest skyscraper and man-made islands, Dubai is pursuing ambitious new goals.

A 10-year economic plan known as D33 aims to double the size of the economy and make Dubai one of the four largest financial centres in the world within 10 years.

Dubai also wants to increase the length of its public beaches to 105 km from 21 km by 2040 and to revive the Palm Jebel Ali project.

The number of tourists returned in 2023 to approximately 2019 levels, and research conducted by Knight Frank MENA concluded that last year Dubai was ranked fourth in the world in the most expensive real estate markets in terms of demand, with sales of 219 homes worth more than $10 million.

Dubai's population increased to more than 3.55 million in 2022, according to official statistics, which represents an increase of 2.1 percent from 2021, and four percent since 2020. Standard & Poor's expects the population to exceed four million by 2026.

Safe haven

Real estate research firm CBRE reported that average real estate prices rose 12.8 per cent in the first quarter, and villa prices increased by as much as 15 per cent. Villa sales exceeded the high levels recorded in 2014.

According to the Better Homes list, buyers from Russia ranked third among the ten most-purchased by nationalities in May, after India and Britain.

"Dubai has really positioned itself as a global safe haven," said Richard Wind, managing director of Better Homes in the emirate, adding that it is safe for families and politically and financially stable.

"It is no longer a speculative market. It is a market based on real investment. I think that's a big difference from what we saw in 2008, 2009 and maybe the last peak around 2014."

Budgets

The recovery has also boosted the balance sheets of Dubai's major companies, including government-linked entities such as Emirates Airlines, Emirates NBD and Emaar Properties.

Standard & Poor's estimates indicate that Dubai's total government debt will decline to 51 per cent of GDP, to record $66 billion by the end of 2023, from 78 per cent of GDP in 2020.

Dubai's five-year credit default swaps reached an unprecedented low of 66 basis points on March 8 this year, far below its high of 316 at the height of the COVID-19 pandemic in 2020. Credit is used to insure against non-payment of debt by a government or company.

 “Dubai is one of the most resilient destinations,” said Philip Zuber, CEO of Kerzner International, which operates the luxury Atlantis One & Only resorts, noting that the emirate kept borders open and business strong during the pandemic. Opened in 2023, Kerzner, the ultra-luxurious Atlantis The Royal Resort, is the second Atlantis resort on The Palm Jumeirah.