That $64,000 Question

I suppose I am a would-be or wanna-be economist when it comes to property matters in Dubai, especially in the face of a good question. One such question came to me from a Muhammad R.,

Is it worth spending so much money in buying property in Dubai Marina?

One way to answer that question is to speak about Dubai in general. Thus in reply,

Having lived in the region for six years and seeing how things work, what is happening in Dubai in my opinion is not a passing fad but a genuine and sustainable effort to create something that has never been tried before in terms of development. It is happening in the context of a stable environment. Only people who aren't very familiar with Dubai seem to quesiton that. I doubt that even a major terrorist attack would upset the state of affairs, as some people seem to fear.

Despite the massive construction boom it isn't an all-eggs-in-one-basket scenario. There's trade, transport, tourism along with other industries. Dubai has a rich low-tax environment. The US military has a stealthy but substantial presence. And of course there's all the money coming in from surrounding states. In short, Dubai has a lot going for it. I don't see any property market collapse or political upheaval or any other destabilizing event in the cards.

The worse that can happen is that 2 or 3 years hence there could be an over supply of property and tourism might not continue to grow exponentially as many seem to be banking on. In such a scenario I would expect that rental rates would fall (but not crash) and property values would most likely stagnate or fall somewhat (but not crash). It will only be in 2 to 3 years that the risks to investors increase, as price levels begin to peak. From those peaks there could be a substantial retreat. But we're not there yet.

So, property in Dubai is a good buy, and for additional reasons (which I'll go into later) the Marina I think is an even better buy.

To talk specifically about Dubai Marina, one then would need to compare it to the many other developments across Dubai. I discuss this question in some detail in The MAG 218 Environment, which looks at the pluses and minuses of the Dubai Marina location with regard to one of its many towers (the MAG 218), in comparison to other Dubai locations.
(See the latest Dubai Marina images.)

Whether more exclusive addresses like any of the Palms, commercially-oriented centers like Business Bay, entertainment districts like Dubai Land or other water-themed developments like the Dubai Waterfront, there are valid arguments for any one area as opposed to another.

In short, the Dubai Marina has to its credit immediacy--it is further along toward completion than any other similarly sized development--and high-letting potential, offering suitable accommodation to both residents and tourists.

Whatever one's take on the $64,000 question, it is interesting to ponder. Long-time residents in the UAE will likely have a different view from newcomers or passers-thru. Industry professionals may be biased one way or the other. Economists, of course, should be able to provide the best analysis. In that spirit, I offer my own educated guess.

Go to DM Blog latest posts, Dubai Marina Communities or MAG 218 Community homepage.