Dubai Eyes Long-Term Growth Amid New Property Boom

It’s known for the world’s tallest building, and its man-made islands. Now Dubai property seems to be booming again.

Average property prices jumped almost 13% in the first quarter, with villa prices up even more. Drivers include an influx of Russian money amid the conflict in Ukraine.

Dubai is a city that benefits in times of uncertainty. When we are seeing instability in the world today, be that geopolitical, be that economic, or be that through climate challenges, Dubai is really stands out as a safe place to be for people, for their families, for their businesses.

It was a different story back in 2008, when Dubai was hit hard by the global financial crisis. Property prices crashed and the city saw people and money flee overseas. In the end, Dubai had to take a $20 billion lifeline from oil-rich neighbor Abu Dhabi.

Now the hunt is on for growth that avoids such pitfalls. Tourism is one part of that, with visitor numbers already almost back to pre-health crisis levels. A plan to quintuple the length of public beaches should mean there’s room for more in future. Dubai is also investing money into social and business reforms, and sectors like digital technology. Dubai aims to become one of the world’s top financial hubs.

But the global Financial Action Task Force put the Emirate on a so-called “grey list” of areas of concern with regard to financial crime. That could deter investors.

Some fear soaring prices could also make Dubai too expensive for regular workers. Finding staff is already an increasing issue.

Philippe Zuber, boss of resort operator Kerzner International commented:

"Attracting talent and retaining talent, it's the biggest challenge and the biggest opportunity to the hospitality sectors. So few things, globally we have a lot of work to do, to be better and better every day”.

Right now the property boom is raising spirits for investors. Among other projects, Dubai is reviving work on some stalled island developments. Some just wonder if it also risks reviving the flash and excess seen before 2008.