One of the benefits of Cityscape Global in Dubai, the annual property exhibition that finished its three-day run today, is to serve as a barometer for the industry. All the indicators from this year's event suggest the market is progressing steadily, buoyed along in part by Expo 2020.
This benign economic projection is a welcome contrast to the tumultuous years of the global financial crisis, when demand at Cityscape exhibitions held in Dubai and Abu Dhabi soared and then plummeted. This suggests the industry now – and its prognosis for the country’s economy in general – is on a sustainable footing despite the continuing low price of oil on global markets.
Among the factors to which people have paid heed is the distinction between property sales and rental demand, with the latter being slightly stronger than the former. Abu Dhabi has its own Cityscape conference scheduled for April but CBRE's Global Living Report, released during this week's exhibition, reported the capital is the second most expensive city in the world to rent property in, exceeded only by London. Dubai came in sixth, after Singapore, Los Angeles and New York.
A corresponding push for more affordable housing in Dubai is another sign of a maturing and stable property sector because the city will not prosper unless workers in a wide range of income levels can afford to live there. Similarly, the boost provided by Expo 2020 has seen leading businessman Khalaf Al Habtoor voice concerns about the scores of three- and four-star hotels that have been approved since Dubai won the right to host the expo two years ago. He cautioned that financial approval should not be granted without independent analysis about their longer-term feasibility.
All these are important points, and caveats about potential future volatility are well-founded. There is still too little information to state definitively how long oil prices will remain low, exactly how large a boost Expo 2020 will bring and also to inform us about the prospects for the economies of China, the US and the eurozone, all of which have the potential to impact our economy. But to the extent to which we can confidently predict the future, we ought to be pleased that a benign economic forecast has emerged from this year’s Dubai show.
