While the hopeful gaze upon Dubai, others await its downfall. The levels of engineering and economic marvels evoke envy and suspicion. Can a bubble inflate forever?
Evgeny Kogan, investment banker, professor at the Higher School of Economics, and author of the Bitkogan Telegram channel, examines three persistent myths about the Dubai property market — and why the data consistently contradicts the pessimists. Myth 1: Dubai has reached its growth limit. The laws of supply and demand tell a straightforward story.
Where demand increases, supply invariably follows. Housing is a necessity for every individual, so demand for real estate rises with population growth. By 2040, Dubai aims to increase its population from the current 3.6 million to 7.8 million — a potential growth of more than double.
Constant improvements are already underway: the UAE was recently removed from the FATF grey list, signifying an influx of new investments and an even greater increase in entrepreneurs. The new cloud seeding program ensures a more comfortable temperature year-round. Myth 2: There is no high-yield real estate in Dubai.
The main pitfall for any novice investor is purchasing property for themselves rather than for investment. In reality, developed and comfortable areas are the worst choice for maximising returns. The correlation is direct: the higher the risk, the greater the return.
Real estate in developing areas — where a new metro station or shopping centre will be built in a few years — offers significantly higher growth potential than established locations. Myth 3: The Dubai market is overvalued. Comparing the price per square metre with other business hub cities tells a different story: New York sits at approximately $18,200; London at $17,400; Paris at $12,600; Hong Kong at $29,000; Singapore at $19,600.
Dubai averages $4,500 per square metre. Although Dubai can unquestionably be included in the ranking of world capitals, real estate in the UAE remains one of the most undervalued in the world.