Whenever a new trend is introduced in the finance or investment sector, it is mostly struck by speculations about its feasibility and success. Dubai is currently flooded with speculations too and the target of these speculations is the increasing investment trend in the property market.
The most prominent among all is the doubt regarding the oversupply of properties. Presently, many properties in Dubai are under construction. Therefore, by the end of year 2009, the construction on almost all of these properties will be completed, enabling these (mostly huge) projects to accommodate occupants (mostly expatriates). Recently, investment and real estate experts have been overheard discussing the chances of an oversupply of apartments and other residential properties. They are also considering a worrisome speculation that the city might be swamped with unoccupied and un-saleable properties.
Another worry is regarding the tax-free law. Presently, Dubai is a tax-free heaven. No taxes are imposed on investors to start any business or buy any property in Dubai. But the international monetary fund is continuously urging Dubai to impose some kind of taxes. Even though the government of Dubai has resisted it so far, there are speculations that Dubai will be forced to implement taxes in the near future. If this happens, it will definitely decrease the flow of foreign investments to Dubai.
One more subject of speculation was about the displeasure in the rulers of other emirates on Dubai’s decision to open the property market to foreigners. But now, following the steps of Dubai, Ajman and Ras Al-Khaimah have also taken measures to attract foreign investors by implementing some of the same ideas. Hence, these speculations are not going to make any difference in Dubai’s decision to be an emerging land of investments. Only time can give an answer to the question whether this boom will last or end up soon.