The ever growing demand for prime property has also engulfed the emirates and in the last few years, prime locations in the emirates like Dubai have seen a real estate boom. Considering that Dubai was a highly competitive but low priced market, this real estate boom is the last thing that the government wants. A lot of experts feel that Dubai is heading pretty much the same way where some of the Asian markets have headed in the past, towards overpricing. The reason for this is pretty simple. There is not enough supply to meet the demand in Dubai.

Post 2002:-

In May 2002 the crown Prince of Dubai, Sheikh Mohammed bin Rashid Al Maktoom made a stunning announcement which shook the foundations of the real estate market in Dubai. This allowed foreigners to buy freehold property in Dubai. What this did was that it opened new avenues and the market immediately boomed. The tax benefits, business advantages, the continuous rising demand and the lack of supply have also contributed to the steady rise in property prices in Dubai.

The Population:-

Along with the above mentioned factors one should not forget that Dubai is one of the fastest growing populations in the world. The prosperity of the city and the strong trading tradition are also adding to the demand for property. This in turn is increasing the pressure on rental demand and the prices for property. Many experts consider this to be one of the safest markets ever to venture into.

Curbing the rise:-

There is only one simple way to curb the rising graph for property prices in Dubai and that is to increase the supply. The government seems to have hit bulls-eye this time and has announced a lot of massive projects that will ensure that the market is well supplied for a lot of time to come. The Dubai waterfront mini city near Jebel Ali, the 250 tower Dubai Business Bay are some of the prime properties coming up in Dubai. These will surely curb the rise and prevent capital values from going too high for some time. But once again, the problem is that there is a lot of time for these projects to be completed and delivered and till that time, the demand will increase manifold.

Where is it headed?

The government has announced and is working towards making Dubai a safe market where money can be invested with a long term goal. It does not want Dubai to become a market dominated by housing options that can swing either way any time. Hence there are continuous and dedicated efforts to keep the supply in line with the demand. There are also talks to price the short term speculators out and to encourage long term investment. Most experts are waiting for the demand and supply to top out and for a market correction to happen which should set the prices right. If you are planning to take the plunge into the real estate market in Dubai, then this might not be the right time. Wait for the prices to go down or if you are a risk taking person then you can perhaps venture into the real market in Dubai but making sure not to put all your eggs in one basket.