‘Interest in Dubai could lead to sustainable growth’
Keeping a balance will stop real estate market from overheating, says property expert.
November 27, 2013 9:19 by Muhammad Aldalou
If Dubai’s bid to host the World Expo 2020 is successful, the primary and immediate impact on the emirate’s real estate sector will be one of sentiment, according to Nick Maclean, managing director at CBRE Middle East.
A victory for Dubai would effectively highlight the opportunities that the emirate has to offer to a much broader audience, not just during the six-month event, but in the run-up to 2020 as well. Dubai will have an opportunity to benefit from the spirit and increased interest.
The level of renewed interest in the market that will inevitably follow the win is clearly going to have an impact on property values, both residential and commercial, according to Maclean, who adds that it’s not yet clear whether the impact will be immediate or gradual.
“There will definitely be renewed interest in real estate, particularly around Dubai World Central, where the Expo 2020 itself will be staged,” he says, adding that the immediate impact will likely affect the residential segment, due to a higher number of visitors, followed in due course by the commercial sector.
As for the dangers of the market heating up due to excessive speculation, Maclean says that every real estate market relies on an element of speculation to keep it properly fuelled and prices inevitably go up. The key, he says, is to get the right balance between buyers who are speculators and those who are occupiers.
“There are several things that can be put in place – it’s not in anybody’s interest to develop a bubble that is not sustainable,” he explains. “I think the good thing about the Expo 2020 is that the additional interest in Dubai could lead to a more sustainable level of growth, but we have to be cautious not to get back to the same situation we were in 2008.”
If Dubai’s bid to host the World Expo 2020 is successful, locations around Dubai World Central will be the immediate beneficiaries. Since visitor numbers are expected to increase dramatically, Maclean says that it will be important for the government to expand and enhance the current infrastructure and its capacity.