Economic Outlook for Dubai and UAE

Growth of both the UAE's tourism and commerce sectors has been staggering, with impressive skyscrapers shooting up across all major cities. The UAE government is planning to spend over US$ 30 billion during the next five years towards the construction of new infrastructure projects, and government, commercial, and residential buildings (Source: Government of Dubai Department of Tourism & Commerce Marketing).

Large Expatriate Community

Naturally, much of the economy of the UAE is based on the vast oil industry. However, the region is also developing as a major commercial base for Western companies conducting business in the Middle East. This is creating a huge market for expatriate workers (who take their earnings tax free) that need high quality accommodation on medium and long-term leases.

UAE Gross Domestic Product

The UAE's gross domestic product (GDP) is projected to rise to $190 billion in 2007, continuing the strong upward trend of the last few years, according to the Ministry of Finance & Industry. Public and private investment remains buoyant boosting real GDP growth; for the period 2008 to 2012 average growth is forecast at 7.6% per year (Source: The Economist Intelligence Unit).

Growth in FDI (Foreign Direct Investment)

Illustrating its ascendance onto the world commercial stage, the UAE attracted $12 billion in foreign direct investment (FDI) in 2005, the most recent year for which official figures are available, moving up from 90th in the world during 1993 to 1995, to 15th in the world between 2003 and 2005, according to Shaikha Lubna, The Minister of Economy. Dubai accounted for 43% of the UAE's non-oil GDP according to the UAE Ministry of Economy.

A Booming Construction Industry

Construction, real estate, and business services sectors contributed 11% of Dubai's GDP in 2006, and tourism contributes to around 18% of Dubai's direct GDP and 29% of indirect GDP (Source: Dubai Department of Tourism and Commerce Marketing).

Investment in Dubai Real Estate

Investment into Dubai's real estate sector has increased substantially from £1.6 billion (Dhl1 billion) in 2000, to £23.7 billion (Dhl65 billion), and is forecast to rise to £26.4 billion (Dhl84 billion) by 2010. This will mean Dubai's real estate investment will contribute 35% per year to the Emirate's GDP over the next 5 years, according to the Department of Tourism and Commerce Marketing, Government of Dubai.

Global Investment Property Hotspots

Buying property abroad can be an excellent investment. Whether you are purchasing property to live abroad or as an investment opportunity, research and due diligence are always key. Although we only recommend investment property hotspots in countries that are able to offer a higher than average return on investment, we can not overstate the importance for property investors to do their own research and due diligence before committing to buying a property in Dubai or abroad.

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