Dubai real estate: Analysts see “no indication” of a property market bubble

According to a real estate specialist, there is currently no proof that a real estate bubble is developing in Dubai.
The city’s real estate sector has been on a post-Covid bull run, hitting continuous records throughout 2022. On Thursday, the market posted AED2.7 billion in transactions for the day, a new record. The market is already hot, with some pointing to further highs ahead with the FIFA World Cup Qatar 2022 looming large.
“In my viewpoint, there is presently no evidence to suggest that a bubble is occurring [in Dubai],” Morgan Owen, managing director of real estate firm Provident Estate.
Instead, Owen explained that while the market’s ongoing positive sentiment has helped Dubai achieve a quick recovery since the pandemic began, it “should not be confused with a bubble.”
For investors, Owen warned that preparation is key, as market downturns are impossible to predict.
“This does not imply that there are no risks in the market; on the contrary, concerns in the market are ever-evolving, such as the fluctuations in exchange rates and the prices of oil to name some,” he said.
“Investors in real estate should constantly be prepared and comprehend their investments. They must strike a balance between their risk and exposure, for example, they need to be knowledgeable of their liquidity and if they can survive if a problem arose.”
The luxury sector for property in Dubai has been particularly prosperous amid the real estate sectors rise. Prices in some areas have already more than doubled so far this year, with little sign of ultra-luxury prices slowing down.
“What we have also observed is that the “ultra-luxury” sector of the economy thrived even when things were difficult. This is primarily due to the fact that those with money to spend did not change their behavior,” said Owen.