One of the hot topics these days is world economical and financial crisis. The entire universe is holding its breath and watching the stocks go up and down and currencies fluctuate.
As a side effect of this, Dubai is under limelight (as if it never was), and everyone is speculating about the future of Dubai.
It is no secret is Dubai is being effected by the financial crisis, and the effects will continue to arise, but my prediction is that this region will not be as severely effected as other worst hit regions like Europe and America.
The reason is simple. Gulf region is the fastest growing region in the world in terms of economics and business opportunities. And because of oil resources, the demand of which will not go down for years to come, the government can continue to fund the projects and organizations to avoid collapse.
The only concern is about the real estate market, which has been booming for a couple of years. The problem is that there are no buyers in the market at the moment and investors are avoiding risk. So the prices there were going up constantly have been steady for a couple of months, but they are not going down.
A correction in the market was long overdue. So this might be the time for it. Dubai will see a correction in the real estate market over next few months, and prices might come down by a few points, but as soon as they become affordable again, there will be a surge of buyers.
There is a huge target market that is being ignored at the moment. That market is the people who live and work in Dubai, but are living in rental properties only because they cannot afford to buy one. Once the property value comes down to the level where Dubai residents can afford it, they will start buying and this will result in stabilization of prices.
However, there are dozens of residential projects that will be ready in 2009 and 2010, resulting in huge supply of property, and perhaps not enough buyers (or investors), which again is a good news for residents as such property will be available to them at affordable rates.
So this is really a roller coaster ride. There will be ups and downs over the next few years. Plenty of people will make and lose money in the process. But overall I see a very bright future for this region, simply because of the financial backing the government has in the form of oil, which they can use to support themselves for a long time.
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