A City of Excess

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Dubai is viewed by many as a city of superlatives, and that may just have been the vision of its founders. Dominated by more than a hundred skyscrapers, this tiny emirate has made a name for itself not only in the Middle East but all across the world.

What one really wonders is whether the grandiose plans of the ruler and the Government of Dubai will really bear fruit and if so when. Dubai has clearly produced plenty of excess capacity, which may force it to not only lower its rates but also keep them consistent and realistic for a long time to come.

The present room rates at some hotels are still too extravagant, as they insist on living in a fool’s paradise instead of waking up to the reality of what has taken place in the last few months. Those that have indeed woken up to the situation will emerge the gainers, and the sooner the rest of Dubai catches up, the better.

Meanwhile, the local demand for housing developments has fortunately been steady enough for residents to still consider 2010 as a good time to rent or purchase a property in Dubai. The latest survey results also indicate that the oversupply of housing units in Dubai will be greater at the upper end of the market during 2010 as the emirate’s residential developments are dominated by luxury properties. In essence, the luxury housing segment is likely to witness more surplus units compared to affordable segments during the year.

Regarding how optimistic the residents were about their financial circumstances, the results show that the majority are largely neutral or optimistic, with the average resident indicating a mild optimism. The same is the trend shown in future real estate preferences.

Concerning the question as to would the respondents be willing to relocate or move to a new property in 2010, abound 12 per cent of the residents expressed some interest in renting or purchasing a new property during 2010. In fact 83 per cent of the respondents were interested in renting rather than purchasing a new property. This clearly shows the role that the unavailability of credit and uncertainty over future prices has played in the current circumstances.

The real estate sector has been the spearhead of Dubai’s property boom and development in the last 20 years or so, but the last six years have witnessed the most significant progress. Real estate pulls in a multitude of migrant workers of different nationalities. It also gives an impetus to retail and other sectors of the economy, from shopping to housing and rentals, from dining to leisure activities. The three year long term visas were a unique attraction for expatriates who came to work in Dubai and be a part of its development.

At present due to resumption of projects in the UAE real estate sector, there is some renewed interest in job websites Dubai and job vacancies Dubai but people today are by and large more interested in job websites Abu Dhabi as they would prefer living and working in Abu Dhabi, the capital city of the UAE due to its more stable economic condition.

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