In major crises the ultra-rich put their money into properties in Dubai. We saw it during the Covid pandemic, and now in Russia's war against Ukraine, as well as the one in the Middle East. Prices are literally exploding right now.
While the Middle East conflict casts a dark shadow over the region, wealth in Dubai is growing. Tourism and construction are booming, while the emirate is a safe haven in a region rocked by the assassination of Hamas leader Ismail Haniyeh, ZDF notes. In front of the German public-law media, broker Jean Joschinke explains: “Dubai is in a unique position. We accidentally became the biggest winner of the crisis in the region.
What does Dubai offer?
It is not the first time that the emirate profits from crises - it was the same during the Covid pandemic and during the war against Ukraine. In times of instability, the super-rich seek security, low taxes and simplified visa regulations. And Dubai offers all this, writes ZDF.
Demand for real estate is huge, prices have skyrocketed. The state-backed real estate concern Emaar Properties made, according to its own data, a turnover of 7.4 billion euros in the first half of 2024 alone. For comparison, last year the turnover for the same period was 5.2 billion euros.< /p>
The average price for a house in Dubai, meanwhile, is over 2.5 million euros - an increase in this segment of 38 percent, ZDF notes. As a “refuge" in Dubai they are also looking for more and more influencers so that they can work there without paying taxes.
More and more tourists, a new airport is being built
Dubai International Airport also recorded a record in the first half of the year - almost 50 million passengers. For the whole of 2024, 81.8 million are expected, which will represent another record, says airport boss Paul Griffiths. In the next ten years, Dubai wants to build another airport - worth almost 35 billion dollars.
According to data from the local central bank, in the first six months of this year, Dubai was visited by 9.3 million tourists - more than before the start of the Covid pandemic. The emirate's population has grown from 3.2 million people in 2018 to almost 3.7 million. Another 1.1 million people live in the city-state temporarily or commute there daily because they work in Dubai. The royal family hopes the city's population will reach 5.8 million sushi in 2040.
And in terms of tourists, the aspiration is for Dubai to become the most visited city on the planet by 2025 and surpass Istanbul and London, writes the German "Di Welt" in turn. According to the publication, the goal is achievable: in Dubai are not only the tallest skyscraper Burj Khalifa and the most visited mall in the world with over 105 million customers in 2023. The emirate also has the fastest police cars on the planet - Ferrari, Bugatti and Lamborghini, as well as the highest fountain - 105 meters.
At the same time, as he noted to “De Welt" Dubai Tourism Chief Issam Kazim - We are more than the sum of all our attractions. “We started as a speck in the desert, and today we are a global metropolis. People of 200 nationalities live in Dubai - citizens of the world. This is the real superlative.
Could an oversupply of properties hinder
However, experts question how long this record growth can last. Some warn that the oversupply of real estate at some point could act as a brake on the market - if the demand is not on the same scale. “From 2025/2026 onwards, there will be a large supply of objects whose construction began in 2021," says analyst Tatiana Leskova, quoted by ZDF
. “We assume that the high demand will not be able to be absorbed by the market in full, which may lead to a downturn in the economy."
In the first half of 2024, developers have already completed more than 6,000 homes and plan to hand over another 20,000 by the end of the year, according to state news agency WAM. “These are big numbers, but the market is absorbing them. "People just buy homes," states broker Yoshinke.