In 2010, things looked gloomy in the Dubai real estate sector, but now it’s booming again. This is partly due to the Arab Spring, which has made a lot of wealthy people in the region move their money to the relative safety of the oil rich emirate.
Dubai’s economy is back on track with GDP growth at almost 5%. Combined with the currently very low interest rates this will naturally fuel property prices – which are currently growing faster than anywhere else in the world – and create fears for yet another bubble.
“There is however, an additional driver of demand that didn’t exist in the mad credit frenzy of 2003-2008 – the influx of money and people that has come as a result of the Arab Spring,” writes Kit Juckes, global strategist at Société Générale, in a blog post.
“The rich are either sending their money to the Gulf, or sending themselves there too. It isn’t easy to quantify but the planes are full, the hotels are booming and the anecdotal evidence is plain to see. Reuters estimated earlier this year that DH30bn flowed into the region last year and this year, Cyprus…Syria and Egypt will all have added to the flow of money.”