“Dubai is in a very unique position,” said Zhan Goshinki, chief operating officer of property consultancy Property Monitor. “We are the only beneficiaries of the crisis in the region.”
Dubai has a long history of indirectly profiting from regional crises. When the wealthy are too worried about unrest, the city offers stability, low taxes and a friendly visa regime.
The current turmoil has put Dubai in a position to benefit once again, as demand in Dubai’s real estate market is surging, pushing luxury properties to record valuations.
Emaar Properties said its development business generated sales of $8.1 billion in the first half of the year, up from $5.2 billion in the same period last year.
Across the city, valuations for high-end villas in Dubai hit a new record, rising by about 38% in the second quarter of 2024 compared to last year, according to property consultancy ValuStrat. The average price of a villa topped $2.7 million for the first time in a decade.
Next up are luxury apartment heights, with sites on Palm Jumeirah, a man-made archipelago overlooking the Gulf, already surpassing their 2014 peak.
Dubai International Airport, the world’s busiest for international travel, also saw a record 44.9 million passengers in the first half of this year. Dubai plans to move operations to a new airport worth about $35 billion over the next decade.
In the first half of 2024, about 9.3 million tourists visited Dubai, surpassing pre-pandemic levels, according to research from Dubai government-owned Emirates NBD.
But some analysts question how long the record high can last. Some have warned that oversupply of housing could eventually slow the market if it doesn’t keep up with demand.
“From 2025 and 2026, there will be a huge new supply of new units that started construction in 2021. By then, we fundamentally believe that the new supply will not be fully absorbed by the market, and this could lead to a cyclical slowdown,” Tatiana Liskova, an analyst at S&P Global, told The Associated Press.
Source: AP
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2024-08-17 16:04:02
