Lessons for India: This is how Dubai’s realty sector was strong despite economic slowdown

Despite speculative clouds of dampened demand induced by the purported slowdown hovering over Dubai, investors still see the home Burj Khalifa with much interest. In fact, Dubai’s realty sector was strong and its demand was increasing by the day, according to September’s Cityscape Global 2015 report.

“Although the activity in real estate sectors of both Abu Dhabi and Dubai has been slowed down by global factors, there is no shortage of positivity in the market. High-quality options that offer lucrative gains still remain in high demand,” Bayut.com CEO Haider Ali Khan said.

With India’s realty sector at a dismal state, the sector has lessons to learn from Dubai. A sneak-peak into the inside story

Enter the field

Studies indicate numerous new affordable housing projects entering the market in the coming two years. Office and commercial spaces remained in high demand, depicting a healthy inflow of business to the country, in September.

While many property experts expected property prices to decline in anticipation of the 25,000 imaginary units to be delivered in 2015, the month of September passed smoothly in Dubai amidst price stabilisation.

Prices in some locations in Dubai did experience a slight dip due to low transaction volumes, but rents remained strong on average and continued with their upward trends in the more popular locations of the emirate.

The low transaction volumes were due to the government increasing property transfer fee from two percent to four percent of the property value, but this never dampened rental demand in Dubai. The emirate’s residential market offers average annual rental returns of over 7.2 percent of the property value, which is even higher than London’s.

Abu Dhabi
The property market of Abu Dhabi found itself in the perfect position for mid to long-term investment in September. Owing to a constrained supply, residential rents rose and so did the prices.

The Abu Dhabi Urban Planning Council also announced that it would be launching a new policy making allotment of 20 percent of all new residential projects to affordable housing mandatory for all developers.

Despite the oil-price crunch, there has been no slowdown in the construction process of ongoing projects and some new launches are in the pipeline as well.


The real estate of Abu Dhabi trudged on with a steady progress in September 2015. Property prices remained strong, while rental yields posted one of the best trends in the region. Demand for apartments for sale as well rent was high with significant increases in the searches.

Of the total searches for rental properties in first 10 months of 2015, 85% of the leads generated went to apartments, while only 5% corresponded to villas

The leads generated for villas remained the same compared to Jan-Oct 2014, however, there were 22% more leads generated for apartments up for rent.

Of the total searches for properties on sale in first 10 months of 2015, 81% of the leads generated went to apartments and 8% were for villas


1. Population rise- The growing business and employment activity in Dubai and Abu Dhabi means resident population is on the rise and creating a persistent demand for housing and commercial spaces. And with economies offering professionals, businessmen and investors much more than once thought, Dubai and Abu Dhabi appear ready to face all eventualities.

2. Permutation and Combination- The developers banked on the height rental yields and affordable prices of residential properties in Dubai. The unique combination made the new launches particularly attractive to investors and homebuyers, who were sure that the comparatively low prices of Dubai properties today would prove to be exceptionally beneficial in the future.

3. Role of property developers- The property developers of Dubai and Abu Dhabi are now focussing on building mid-end affordable residential units. Developers are addressing the imminent demand to not only strengthen the property market of both the emirates, but it would also lay to rest all fears that developers were only bent upon launching high-end luxurious projects.

Looking for buying or renting an apartment in Dubai anytime soon? You need to see this first.

(Image credits: Bayut, gentside)
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