Dubai real estate - Why the investors are still hesitant to make large investments in Dubai properties

Dubai real estate has been in the lime light for a mix bag of reasons. Some of the things like the development of new real estate laws and the starting of new real estate projects in Dubai are good to happen while there are some shady patches still lurking around and shadowing the whole recovery process. There have been increases in the level of investments in Dubai property market but large investors are still not that much confident to invest. Let us have a glimpse at the reasons which shattered the confidence of the prospective investors of Dubai and UAE real estate.

Lower level of Demand

In spite of all the sincere efforts by the Dubai government authorities directly responsible for the real estate in Dubai, the demand of the real estate is still low. It seems unfair to blame the real estate development as the only factor responsible for the demand of real estate in Dubai. It is a cold fact that Dubai real estate has been one of the major sectors responsible for generating jobs in Dubai but the overall job creation process in Dubai has been sluggish, at best. Investors are concerned that if they build something up which no one seems to be interested in buying, that would land them into trouble. The vacancy rate is visible all over Dubai, which portrays a “no interest” attitude towards buying or renting out property.

Undeveloped and vacant properties

Huge buildings built or in process of being built give a look of haunting houses, where no one seems interested to go. Many investors are of the view that until the already vacant space is filled, there is no point in building new real estate. A good point for Dubai real estate market to start is to first get residents for the empty properties before moving forward, as this will surely impact the confidence of the prospective investors in Dubai.

Pending cases in the courts

Pending cases is a major worry for both the investors as well as the Dubai real estate government authorities. A speedy justice will also help bring up the level of confidence of the investors. Unnecessary delays of pending property cases also have a negative effect.

Weak economic conditions

When we compare the full scale economic activity in Dubai during the boom era with the current level of economic activity, we see a significant drop. Improvement in economic conditions has a multiple effect. Better economic health will not only increase the confidence of investors in Dubai real estate but it will also create more jobs which will naturally increase the demand for real estate in Dubai as compared to Ajman property or Abu Dhabi property. There will be no need for artificial means of increasing the Dubai real estate demand like we see in many other parts of the world.