Referred to as being the Arab City of Gold by Statesman.com, Dubai has certainly seemed to be as good as gold recently as far as its property market is concerned. With the creation of a number of different corporate and individual fortunes over the last few years, Dubai could certainly make a case for laying claim to that title.
However, a lot of the surge in property prices in Dubai has been the result of a lack of supply and highly inflated demand. These two things have resulted in the overvaluation of property and when that happens it has the tendency to create a property bubble that eventually bursts.
For Dubai specifically, the goal for 2008 is to create supply and to create it as quickly as possible. To that end, it was a big relief for many people involved in the Dubai property market when Dubai Properties announced that they had a goal of creating 5,000 different units over the course of the next 11 months.
These units would be mixed-used, with some of them being commercial, some being retail and some being residential. With the large number of projects that Dubai Properties is currently involved in, it would not be difficult for them to find a diverse set of units to build, launch and then relinquish.
The only problem is the quota.
Dubai Properties expects to open 100 outlets in April of 2008, with 300 more coming along in the month of June. These outlets will of course be multi-unit in nature, but at the same time Dubai Properties is working in a market where large promises of additional supply have been made before. The end result is almost never close to the prediction and that is part of the reason that the property bubble in the city has been created.
Many eyes will be on the Dubai Properties operations in the hopes that the company is able to make good on its word and deliver the 5,000 units.
