Taking a closer look at the Dubai economy

When you’re investing in property, understanding what is driving the property market is of utmost importance to be certain that you’re investing in property supported by strong foundations for growth and longevity, for this reason, we’re taking a closer look at the Dubai economy.

As the jewel of the Middle East, Dubai is a city that’s known for its world-defying feats. From having its own man-made islands to being the home of the world’s tallest buildings, Dubai amazes the globe in terms of what’s on offer here, and it’s safe to say that investors are watching closely. 

In recent years, the city’s skyline has continued to transform into a bustling metropolis where sand dunes once stood. Dubbed the ‘crane capital’ of the world, new apartments, hotels, leisure facilities and infrastructure continue to be built in Dubai, with the population set to double in the next two decades. 

Dubai also happens to be one of our key investor locations here at Thirlmere Deacon. So what is the secret behind Dubai’s success, and what does the future hold for investors? Here is why Dubai has investors, not to mention the whole world talking.  

Dubai: An Overview

  • 3.3 million residents
  • 29th wealthiest city in the world
  • The wealthiest city in the Middle East & Africa (MEA)
  • Home to 54,000 HNWI
  • No income tax 
  • Political stability

Dubai’s History: How Did The City’s Economy Transform?

Dubai is a relatively new city, as it was only formed some 189 years ago. Even as recently as the 1960s, Dubai only had a population of around 30,000 residents, which demonstrates its incredible development, given its current population is 3.4 million, and this figure is expected to swell to almost 6 million residents by 2040. 

If we go back to the 1930s, Dubai’s population was around 20,000. This period is known as ‘pre-oil Dubai’. Originally, the area was known for the pearl industry, before its decline saw the city use its waterways, and their strategic location close to Iran and The Persian Gulf to attract merchants from all over the region. 

Many years after oil was discovered in nearby Abu Dhabi, Dubai was also found to have its own supply of oil too. Surprisingly though, oil was not what the city based its fortunes on over the longer term, as only a small amount of oil was discovered. Instead, then prime minister Sheikh Rashid used the initial money generated by the discovery, to create lasting change in Dubai’s economy, by investing the money back into the city to further grow and develop it. 

Heavy investments were made in infrastructure, which established electricity lines and built new ports, as well as Dubai’s first airport. This allowed Dubai’s economy to be based on trade, tourism and finance. The construction boom that followed saw the city’s population grow by over 300% between 1968 and 1975.

In the early 2000s, work began on the Palm Islands followed by the Burj Khalifa. Such incredible feats have fuelled the tourism industry in Dubai, which now attracts around 16 million visitors a year. 

Trade has continued to supply the economy also, as Dubai’s main cargo port Jebel Ali is the busiest port in the Middle East. It accounts for 20% of foreign investment in the UAE, and 21% of Dubai’s total GDP. 

Jebel Ali is located in the world’s largest economic free zone and is accompanied by twenty other free zones around Dubai. Each of these zones attracts businesses due to tax breaks, custom duty benefits and the lack of foreign ownership restrictions. 

2024 Dubai Property Investment Guide

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The Future Of Dubai 

The foresight of Sheikh Rashid was instrumental in the Dubai we see today, and indeed what’s to come for the city. That’s because the development and therefore investment in the city have remained consistent off the back of this initial idea to sustain Dubai’s economy long beyond oil. 

A number of high-profile companies are now based in Dubai, including many world class property developers. Also, the likes of Emirates are based here, with Dubai International Airport also recently overtaking Heathrow Airport in terms of passenger numbers.

Most recently, the delayed Expo 2020 held in 2022, brought $7 billion worth of investment into Dubai and featured participants from 192 different countries. It put Dubai on a global platform as a hub for innovation, technology, business, trade and tourism. 

As noted, Dubai’s population is expected to grow to almost 6 million residents by 2040. By this time, Dubai is also aiming to have the crown of the ‘world’s best city to live in’. Work is currently underway to transform three existing areas into new city centres, along with the creation of two brand new cities. $680 million alone will be invested into creating green corridors for pedestrians and cyclists. A new public transport network will also be within 800m of half the city’s population.

So, it’s safe to say that like many of its skyscrapers, the only way is up for Dubai. It is estimated that 240,000 British expats already call the city their home, with 200,000 new arrivals from elsewhere arriving every year. 

Furthermore, working, investing and visiting Dubai has also been made easier with the creation of several new UAE visas.

Dubai Property Investment – Thirlmere Deacon 

Excited by all that Dubai has to offer both now and in the future? Investors are keen to capitalise on the success of Dubai, and property investment is no exception.

Thirlmere Deacon has a number of incredible investment opportunities in Dubai including Berkeley Place which is located in the heart of the Meydan district, and Kensington Waters in Mohammed Bin Rashid City.   

Built to exquisite standards and positioned in unrivalled locations, our properties have projected yields of up to 10%. With Dubai’s grand plans yet to reach full completion, now offers an unmissable chance to secure your slice of the Dubai property market – a city which reported the highest average rental yields for any global city in 2021

To secure your Dubai investment property or find out further information, contact our Dubai office on +971 (0) 4 818 7277, or email us at dubai@thirlmeredeacon.com.

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