The property sector is undergoing a reform. The prices are correcting, and it is good for the economy, not bad.
In Dubai, the real estate sector is usually the topic of discussion during meetings and community gatherings. Many people talk about the sector as if they are experts, big investors or owners of property when in fact most are tenants.
I often hear people commenting on the current economic situation in the UAE, and the great supply in the real estate market, which, in their opinion, reduces investment opportunities as well as annual profits. What’s surprising to me is the fact that most of them don’t even own a housing unit; some of them have a small apartment or one house at best.
I don’t know why they speak for businesses and investors when previously most of them complained against their greed that resulted in high rents for residential and commercial properties.
High inflation, in fact, didn’t allow many new projects from taking off because developers weren’t able to collect the money needed.
Naturally, when the supply increases, the price will fall, which will reduce the cost of living for people. Falling rentals and property prices will also impact the price of products we consume; reduce rents for residential and commercial ventures, and can in turn encourage more entrepreneurs to expand their business or start new ventures.
Additionally, lowering property prices will make Dubai more attractive for international companies. The emirate is a cut above the rest regionally in terms of business infrastructure, rules and regulations, ease of doing business, depth and reach of the market, etc. High cost of living, however, is among the few sore points, and it can come down as property prices correct.
People indulging in talk about the property sector should understand that the foundations of many of the under-construction projects were laid down as soon as lands were bought, which in many cases is done months before the start of an initiative. It doesn’t make business sense to stall construction or postpone the plans for building sites.
Property sector in the UAE, especially in Dubai, has not lost its sheen for investors. The place is always attracting new investors who are eager to invest and have a slice of the growing pie.
The authorities in the UAE, meanwhile, have taken a slew of measures to make the sector more attractive. They have reviewed fees associated with buying and selling of land, slashed costs of many services and introduced new laws, which is also immensely helpful to investors.
There is a course correction in the property sector. Reforms are being rolled out.The prices are correcting, and it is good for the economy, not bad. With rentals and property prices falling, residents in the UAE should see a concurrent fall in the cost of living, too. Rentals make a sizeable portion of expenses here, so a fall in prices should make it easy for residents and bring inflation down.
Businessmen, on the other hand, must understand that they are still gaining high profit compared to their counterparts in other international markets. Developers will stop building when they do not see good returns. They are the best judge when it comes to the property markets. Until then, let’s not worry about oversupply or under-construction projects.
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