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.
Among them is a reinvented from the previous boom years $1 billion development that will be located next to Dubai International Financial Center. The interesting fact about it is that it will be the first new project in DIFC since 2008. The project will include an office tower with 50 floors, retail outlets and a hotel. It is estimated that the building’s first tenants will be welcomed in just three years. However, judging from the experience with the delay of Burj Daman and other projects in DIFC with nearly six years, the handover of the new project it is more likely to materialize sometime in the early 2020s.
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.
To accommodate the housing needs of the people involved in the development and the operations of the facility, a new “affordable housing” project comprising of 21,000 units is currently being sold in weekly tranches. It is called Town Square.
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.
