It is a known fact that the current real estate market in Dubai is going through a price correction phase. This sort of adjustment is pretty common in real estate markets across the globe. Though many people speculate that the extent of price adjustment could be severe, several experts have suggested that there is not much to fear and that the market shall soon recover. Today, in this article, we take a look at a few important global factors that may have impacted Dubai realty market.
5 Global Factors that may have impacted the Dubai Realty Market
Low Crude Oil Prices
Though Dubai is not an oil-reliant and its economy is much diversified, it cannot entirely escape the gloom that has been cast by falling oil prices. After all, a big chunk of investment that pours into Dubai comes from economies which are oil-dependent. This is one of the key global factors that may have impacted Dubai realty market.
Geopolitical Unrest in the Middle-East might have deterred investors from pumping money into the region. Though Dubai has a much stable government, the unrest in the region could well have shaken up investor confidence.
Lack of Liquidity
Lack of liquidity is one big factor. Falling oil prices have coupled with regional uncertainty in the region to create cash crunch in the market. As a result of this, oil-rich countries like Saudi Arabia, have cut on spendings to safeguard themselves in this uncertain economic climate. Even the consumer spending power is witnessing a sharp decline in these countries.
Strong US Dollar / Weak Russian Ruble and Chinese Yuan
A strong US dollar has rendered the Dubai real estate more expensive for foreign investors. Weak Russian and Chinese currencies have also served to keep investors at bay.
Lifting of sanctions against Iran
The lifting of sanctions against Iran also allowed the country to enter to the global oil trade. As a result of Iran’s entry into the oil market, oil prices have further slumped.
In addition to these global factors that may have impacted Dubai realty market, there are other internal factors that have caused the slump in property prices. However, by all estimates, the Dubai real estate market is pretty close to bottoming out now. A period of revival will soon kick in, after which the market will pick pace again. With Expo 2020 on the horizon, this is but inevitable.
The falling property prices, though a concern for some, have provided tenants with some respite. Moreover, this has even inspired many tenants to become owners. To further inspire them, several developers have come up with easy and flexible payment plans. To know more about these easy payment plans, read Easy Payment Plans Lures Home Buyers to Dubai.
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