In recent years, an interesting debate has emerged in Dubai’s real estate market: is it an economic bubble or a stable market based on strong economic fundamentals? This is a question everyone should ask themselves and form an opinion on before investing in real estate in Dubai.

In many discussions, whether among ourselves or with clients, brokers, and other market players, this topic keeps coming up. It reminded me of the days when I was a young intern at an accounting firm in Israel. Almost 20 years ago, there was a trend to invest in land in Romania. Not apartments, not villas, but land. Many Israelis, including those from the middle class, sought lucrative investments and bought land in Romania, hoping for high returns.

Although many Israelis made a profit, the gains were mainly from selling to other Israelis, reaping a handsome profit. Like a game of musical chairs, eventually, the music stopped, and we discovered that these were agricultural lands where no buildings could be constructed. No buildings would grow there, and no official had plans to change the land’s designation. Many Israelis were left stuck with agricultural land in Romania, essentially with chicken coops and potatoes.

Does this mean that the fate of real estate investors in Dubai will be similar to that of land investors in Romania? Absolutely not. Those who invested in Romania did so based on speculation and belief in their ability to “flip” the land or change its designation. In Dubai, real estate prices are rising due to the influx of people coming to live and work in the city, enjoying the high quality of life and low tax regime, and the emirate leaders’ plans to double the city’s population in the next 15 years.

While I do not intend to discuss whether the price increases are justified, there is no doubt that the basis for purchasing real estate in Dubai is more solid than land in Romania. In Dubai, those who believe real estate prices will continue to rise have strong arguments that are not based on shaky grounds.

At Emirati, we will not recommend agricultural land or chicken coops, but we are happy to assist you with anything related to real estate investments in Dubai. Good luck!