By : Olga Bekhteneva
Foreign reports or forecasts, such as a Fitch report, may influence the local investment climate and investor sentiment, which in turn can put pressure on various assets, including Real Estate
In Dubai, Real Estate can also respond to global trends, but the current influx of people and economic activity in the city may mitigate these fluctuations. So while short-term reports can influence the market, long-term trends and local factors often prove more significant.
A recent report by Fitch, prepared by experts based in the United States, sparked concern and panic in the Emirates, predicting a decline in real estate prices. However, it is important to understand that such forecasts do not always reflect the real situation on the ground. Fitch experts may overlook current dynamics and development trends in the country.
In Dubai, there is currently a significant influx of people relocating with their families for work, which supports high demand and economic activity. Therefore, Fitch reports, prepared remotely, may not always accurately capture the local realities and market potential in the UAE.
Fitch bases its ratings and forecasts on a broad range of data and statistics. They analyze macroeconomic indicators such as GDP, inflation rate, national debt, balance of payments, and other key economic metrics. In addition, they review companies’ financial statements, debt levels, credit history, as well as industry and regional trends.
However, in the UAE, several additional factors should be taken into consideration:
Dubai Land Department Daily Sales Transactions
This includes data on off-plan properties, ready properties, mortgaged units, and land plots. These figures offer critical insight into current market dynamics and buyer activity.
Dubai 2040 Urban Master Plan
The government’s strategic agenda outlines key initiatives aimed at positioning Dubai as a global hub for families and international relocation. Key pillars include:
- Sustainability and Green Living
- Expansion of the Knowledge Economy
- Growth in Business and Financial Sectors
- Development of the World’s Largest Airport (projected to handle 80 million visitors annually)
- Artificial Intelligence–Driven Smart Cities (such as those under development in Abu Dhabi)
- Global Events and EXPOs
- Preservation and Promotion of Cultural Heritage
- New Tourism Destinations, Hospitality, and Recreational Infrastructure
Oversupply in Select Off-Plan Areas
Certain communities, such as International City, JVC, and JVT, are experiencing an oversupply of off-plan units. It is important to evaluate these sub-markets carefully when assessing long-term value.
Additionally, approximately 6% of the upcoming supply is aligned with projects nearing completion under the 2040 Master Plan. This highlights the importance of strategic planning in supply and demand management.
When analyzing market potential, countries and investors also factor in national fiscal policies, which significantly impact economic stability and investment decisions.
Thus, their assessments and forecasts are based on a comprehensive analysis of global and local statistics, allowing them to form well-balanced, though not always fully locally accurate, projections.
Latest UBS Report and a bubble index have clearly reported strong demand and Moderate bubble risk score for the housing markets .
