Forecasting the future can be dangerous.
And this is especially relevant to the Dubai property market. Optimistic forecasts usually appear from those who will benefit the most from encouraging buyers into the market such as the vested interest from developers, financiers, and real estate agents. On the other hand, neutral to pessimistic forecasts emerge from 3rd parties who do not have a stake in the market such as independent analysts and think-tanks.
The news print media is also fond of the screaming headline that attracts increased newspaper sales.
How can you make sense of headlines such as these that have appeared over the last month:
“Dubai properties show stability over the past few months.”
“Dubai land prices ‘rise by 13% in 2017”
“Dubai property prices still declining.”
“Dubai’s property market showing signs of bottoming out.”
“Dubai residential property prices down 4.9pc in June”
“Return on investment for UAE property still strong”
Regardless of their stance and viewpoint, many forecasters simply get it wrong.
The Bank of England predicted that the UK economy would contract after the Brexit vote to leave Europe. How many people forecast the dramatic effects of the Arab Spring tsunami as it swept eastwards across the MENA region towards Syria? And finally, how many political pundits got it so wrong in predicting Donald Trump would never win the US presidential election in 2016?
My advice is simple: don’t just read the headlines, spend time reading the substance of the article, and then choose another source with a different viewpoint to obtain a wider perspective.
This is where an experienced Real Estate Agent can be invaluable, someone who acts entirely in the interests of the buyer rather than for the seller, someone to guide and assist their client through the quagmire of misinformation and propaganda.
Right now, Dubai property forecasts predict conflicting upward and downward movement in terms of value and rental returns, depending on your point of view.
However, the reality is more complex.
Movement is down in some areas whilst in other areas of the city, prices are stable or slightly increasing. The fact remains that values and yields of a Dubai property, irrespective of whether the overall market is good or bad, depends almost entirely on the building design, desirability and convenience, the final build quality, the reputation of the developer, levels of maintenance and not so much about location.
When you carefully consider global property markets in the cold light of day, almost all property markets have reached positive territory over the last 10 years, and that is certainly true for Dubai. With investor interest and confidence still high due to the city’s commitment to its future and to the well-being of its citizens and residents, there seems little prospect that the current softness in the market will remain for long.
Our role as advisor and guide to the Dubai property scene therefore becomes critical when the property landscape may appear cluttered and unclear, when conflicting forecast reports create doubt in the minds of potential buyers.
Still confused? Contact me.