After a period of relative moderation, Dubai has regained the confidence to launch new mega projects. Encouraged by ambitious prospects of World Expo 2020, pressuring need for affordable housing and ever expanding expat population, construction activity is bustling at full speed in the emirate.
Time Heals
A popular belief generalises “Time heals all wounds.” The 2008 markets crash is now almost seven years into the past. During this period, Dubai’s economy stabilized, with the tourism and consumer services sectors registering unmatched growth. Real estate and financial markets are on the way of a health recovery, with pattern corrections on the way. Government conglomerates successfully rescheduled and partially repaid obligations to foreign lenders. The people of Dubai now look to the future.
And as a typical economic boom’s characteristic, a few impressive construction projects are being announced.
Other Major Projects
ICD Brookfield Place is just one of the many major projects that are expected to pop up around Dubai in the not so distant future. Among the top priority projects at the moment is the construction of Dubai World Central airport. The facility is projected to cost more than $32 billion and to be bigger than both Chicago’s O’Hare and London’s Heathrow airports… combined.
Mall of the World is also in the works. Dubbed as the world’s largest mall, the facility will have the size of a small city. It will cost $6.8 billion and it will offer shoppers extras like outdoor temperature-controlled areas.
Culture Village is another district which is being developed on a very fast pace. As a matter of fact, a few residential buildings were erected just during the last year. Even the eight years delayed Palazzo Versace and D1 tower are due for handover nowadays, despite that the area’s infrastructure is still far from completion.
Encouraged by World Expo 2020, various developers are announcing mega projects of their own. According to early forecasts, the event has could potentially drive an increase of Dubai’s population by 3.2 million over the next few years. That does sound promising, but it does hide its risks.
Affordable Housing Boom
Dubai has also started to recognize the need for more affordable housing solutions in the emirate. Earlier this month, Dubai Municipality announced that it is working on a plan for the construction of affordable property in the emirate. The houses will be located in selected areas across Dubai and will target buyers that earn between AED 3,000 and AED 10,000 a month. Someone may wonder if all expatriates are offered an opportunity to purchase homes, who will be renting the residential properties of local landlords. Still the prospects of selling more homes in the near future attract more and more developers.
Will Lower Petrol Prices Hit Dubai’s Construction Boom
Dubai’s economy is not dependent on oil revenues. However, the decreasing oil prices have a direct effect on almost every aspect of life in the Gulf. And if governments have accumulated surpluses and have provisions to subsidise budgets and expenses, the ordinary consumers and investors may feel discouraged to spend. That triggers an important question: Will low oil prices stumble Dubai’s new construction boom?
The International Monetary Fund has already downgraded its forecast for GCC economies. That will have an effect on Dubai’s economy, since other Gulf countries are likely to reduce their spending.
However, there is no other city like Dubai in whole Middle East.
