When Eric Trump, executive vice president of the Trump Organisation and son of the US President, told The National last week that Dubai is “one of the hottest property markets in the world”, he was making an astute assessment of what is, by any account, a success story. In just a few decades, Dubai has evolved from its roots as a sparsely populated coastal trading post to become a truly world city, home to a vibrant economy and a diverse population.
Of course, with world city status comes specific challenges – and maintaining a balanced property market in which everyone can afford a place to buy or rent is one of them. As the Trump Organisation unveiled its plans for a $1 billion development in Dubai and England’s Chelsea Football Club announced plans for a branded residential project, a new report from real estate consultancy ValuStrat revealed that demand for housing in the emirate had reached unprecedented levels.
By the end of March, the report stated, Dubai’s population had risen to 3.92 million people, with close to 90,000 new residents added in the first three months of the year alone – an eye-catching average of approximately 1,000 people each day. One of the consequences of this, according to Haider Tuaima, managing director and head of real estate research at ValuStrat, was how “securing an affordable home to buy or rent is becoming more difficult in an increasingly unaffordable market”.
In one sense, this issue reflects the many factors that have fuelled Dubai’s success. The city remains a highly desirable place to live and work owing to its plentiful job opportunities, well-earned reputation for safety, large collection of schools, access to advanced health care and increasingly flexible visa options for freelance workers and retirees, among others. However, the magnetic effect of these positives also creates a fundamental issue: how to house the millions who want to call Dubai home?
That demand is currently outstripping supply, thereby contributing to rising rents and purchase prices, shows the city has reached something of a pinch point. This is a position that a number of leading global cities like Dubai have faced; many other major cities face the perennial issue of managing population booms and heated housing markets. However, the emirate is already showing signs of adopting a strategic approach to get through this period.
Last month, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, announced that 1.46 million square metres of land would be allocated for affordable housing; more than 17,000 residential units are envisaged. Such increased volume is important but so too is developing innovative solutions; Sheikh Hamdan has also been involved in Dubai’s House of the Future, a competition that invites architects to submit “affordable, expandable, and innovative housing designs” that will guide the future of housing in the emirate.
Overall, securing Dubai’s progress as a liveable city necessitates offering housing that caters to everyone’s needs. Certainly, the city’s glamorous reputation will continue to attract those who seek luxury housing; the number of dollar millionaires in the UAE stood at 130,500 at the end of December. But supportive policies that incentivise developers to build sustainable housing to cater to those on mid-range and lower-range salaries will help to buttress the macro-level city planning seen in the Dubai 2040 Urban Masterplan, for example. In this way, Dubai can retain the dynamism brought by tycoons and investors but also retain its character as a place that people from all different walks of life can call home.
