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As we reach the end of what has been an incredibly busy and exciting year, it's time to look forward to 2008 and see what the future might hold. Will it be more of the same or are we facing changes aplenty?
Well, the good news is that despite the many warnings and predictions, this dynamic marketplace still shows little sign of slowing down. With many projects under construction, more massive developments in the pipeline and property prices on the increase, I think it's fair to say there is still some way to go here.
This year saw the introduction of several new laws and regulations in the industry, as well as the establishment of the Real Estate Regulatory Authority (RERA). Such measures have added to the credibility of the Dubai market and put it on a more equal level with some of the more developed international markets; increasing investor confidence and providing additional security in the process. I believe next year will see further efforts to improve industry standards.
The recent addition of home loans and property finance has helped increase sales here and I have a feeling it will begin to play an even greater role. More and more international lenders are opening their doors in Dubai, giving consumers greater options and in turn, more favourable terms. With rental rates at an all time high, people are realising the benefits of buying and with greater finance options now available, I imagine many more will choose to take the plunge and climb on the property ladder in the future.
For a while now, Dubai has experienced a supply and demand mismatch, with demand far outstripping supply. There are many reasons for this imbalance, including; the numbers of new businesses setting up, the amount of people moving here for work and the lengthy construction delays experienced.
It is going to take some time before this existing level of demand is met and currently, any new supply is quickly absorbed. While many people question whether Dubai property prices can remain at current levels, the simple truth is that until supply evens out, yes they can.
Construction delays make it difficult to predict when new stock will be ready and in turn, when the supply will even out. Add to that, the increased demand from newcomers and it looks likely that the under-supply will continue through 2008.
However, there is some light at the end of the tunnel for end-users in 2008, as we will see the handover of units in some large scale projects including Jumeirah Lake Towers, Discovery Gardens and Business Bay.
The increase in tourism coupled with the influx of new residents has put hotel occupancy rates at an impressively high level of around 96 per cent, creating a growing short-term rentals market. Given the greater rate of returns possible through this form of letting and the added flexibility, I can see this industry developing rapidly and further increasing in popularity with investors.
I can safely say that by this time next year the ever changing landscape of Dubai will be a lot different, somewhat bigger, and no doubt, better than ever. Wishing you all a very happy and prosperous 2008!
The writer is managing director of Better Homes.
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