Contrary to popular belief, oil reserves are not what megacity Dubai's economy banks on for sustenance. For this reason, the government of Dubai has invested time, money and strenuous efforts in diversifying its sources of income, with leading sectors being real estate, construction, tourism and hospitality.
Among these, the emirate's real estate sector has emerged as one of the most remunerative and reliable industries. Churning out architectural marvels like the Burj Khalifa, The Palm and the Dubai Mall, the city's focus on infrastructural development is almost unparalleled. Offering extravagant sea-facing hotels, numerous tourist destinations, top-notch living facilities and much more, Dubai is now a well-known name among holidaymakers, second-home seekers and property enthusiasts.
In the first nine months of 2015 there were more than 33,900 real estate transactions in Dubai, amassing a total of AED 186.34 billion.
The property sector is thus one of Dubai's strongest suits. a fact that is also recognised by UAE's Prime Minister and Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. At a recent convention, he restated the government's pledge to fully support all kinds of development projects as he believes the property sector will lead Dubai's economic charge.
A chain reaction
Indians, the biggest international investors outside of the Gulf region, invested AED 13 billion. According to UAE property portal Bayut.com, rental returns in Dubai's popular residential areas like Dubai Marina and JLT range between 6-8%, providing a major impetus to overseas.
Despite slowdown claims, the general sentiment in the realty market remains positively charged. At the Cityscape Dubai held in September 2015, a number of mega construction projects by noted property developers were announced.
Real estate investment is constantly helping the city bring up goliath structures like malls, theme parks and hotels. The robust construction activity in turn nurtures the city's economic climate by opening up thousands of employment openings in the hospitality and services sector.
Meanwhile, the tax-free UAE economy, the country's central location and openness to creativity are fostering the best environment to harbour new ideas for business, making the city a hub for start-ups and innovation. Even as the city's central, sea-facing geographic location adds to the ease of conducting business, the demand for strategists, wage workers, technologists, builders and developers never sees a dull day in Dubai.
The robust construction activity in turn nurtures the city's economic climate by opening up thousands of employment openings in the hospitality and services sector.
The steady inflow of entrepreneurs, on the other hand, also creates a hefty demand for offices and commercial spaces all over the city. The population of Dubai is expected to increase by over 4 million in the coming years, which in turn creates a lucrative opportunity for developers
More to come
Dubai's high rental return rates are likely to grow further as investors compete to get hold of newer apartments, offices and villas to lease. With a thriving tourism industry, the scope of recreation and hoteling is quite profitable, and now, with the grand expo arriving in 2020, business traffic in the city is expected to go above and beyond its usual rate. The prospect of hosting over 25 million visitors for the exhibition is providing a powerful thrust to realty activity in the city.
A mere fishing town once, Dubai has made a name of its own in innovation and development in modern times. The city's real estate industry has a mighty role in playing up this stature, with iconic structures like the Burj Khalifa and The Atlantis leaving permanent etches on the global skyline.