Real estate development is considered one of the most important factors in the overall development of the country. If a country is unable to provide the required real estate facilities to the citizen, then the country will face an increase in the homeless population rate that is obviously not desired by any country of the world. Residential property and commercial property are the basic need of the population [1]. In this paper, the current condition of real estate in Dubai is discussed in detail in the light of supply and demand of the real estate. However, other macroeconomic analyses, competitive market analysis and future policies for real estate in Dubai are also discussed in this paper.

Macroeconomic Analysis of Real Estate in Dubai 

 Real Estate refers to the building, land, and property. Real estate also covers the rights given to the owner for the ownership of natural resources with the land as the legal right for the air above the land and the legal rights representing the right of all resources below that land as crops, water, and minerals [1]. There are two major categories of real estate that includes the residential real estate and commercial real estate. Residential real estate refers to the resale houses and newly constructed homes. While commercial real estate covers the shopping centers, hotels, educational and medical building, offices and commercial factories or plants.

Economics is classified into two major branches that are Microeconomics and Macroeconomics. Macroeconomics refers to the complete and large economics that deals with the behavior, structure, performance outcomes, and decision making of the whole economy of a region, country, or world. In accordance with the research changes in the macroeconomic conditions draw impact on the overall country. As AL-SALEH wrote in his article the secret of Dubai’s Success published by the project Syndicate website in 2016, that middle east countries should learn the economic management and development planning from the Dubai as Dubai is a major center for commerce and investment in the present age [2]. in 2008, global crisis influenced the city-state through inflated real-estate assets of the Dubai but still, their efficient planning caused them to recover quickly [1].

 Wall Street Journal also published an article on the Dubai economic condition, in accordance to the article in 2008 (when the world was facing financial crisis) Dubai presented an idea for the development of a tower in the Dubai with at least two-thirds of a mile tall. Chris O'Donnell (executive) elaborated the idea of the tower by saying that world economic condition cannot remain stable all the time, ups and downs are reality [3]. Dubai would face ups and downs in economic condition while building the tower in these years but they can say that demand would result to continue the supply outstrip. Dubai claimed that in accordance with their current condition they are fundamentally strong in the market, therefore, they cannot be ended as the crashed economy. moreover, in a recent article of Wall Street Journal it presented that Dubai is going to Startup construction projects that estimated worth 430 billion dollar [2]. Macroeconomic analysis of Dubai including the demand, supply, elasticity and competitive analysis are elaborated in detail [4].

Demand and Supply of Real Estate

             The demand for the real estate increase because of increase in population or stable economic condition of the citizens. While on the other hand, factors that cause to increase or decrease the supply are costs of production inputs, expectations, cost of financing, and technological know-how. A research study conducted to elaborate the real estate condition of the Dubai presents the findings that Population of the Dubai (because of new birth and migration) is increasing continuously, therefore, demand property is also increasing in the market. 

                While at the same time income of the population is also increase that is also a contributing factor for the real estate growth in the market. Market analysis of Dubai from 2000 to 2005 shows that during this time population increased from 62335 to 116879 while the gross domestic product (GDP) increased from 72,282 to 88,447 as a result of this Dubai faced increased in the demand of commercial and residential property [5]. As a result of the increase in demand-supply of real estate is also increasing rapidly. In accordance to the records, in five-year duration 2000-2005, total constructed buildings by the government are 205518 that includes 141205 flats, 15930 Arabic house, 43424 Villas and 4959 other buildings [3]. While from the private sector (real estate developers) total constructed units including houses, villas and residential houses during 2006 were recorded as 131,019. Private developers of the Dubai are Nakheel, Futtaim group, Dubai properties, Union Properties, and Emaar. While the projects done by these private developers in response to increasing demand of real estate are International City, Festival City, Gardens Of Discovery, Plam Jabel Ali, Dubai Marina, Jumeirah Lake Towers, Green Community West, Plam Deira, And Dubai Land.

                 However, if we take cumulative analysis of the population growth we will find out that increase in the population is still a challenge for the Dubai development authorities to fulfill the demand of the real estate in Dubai as people are also coming from other countries of the world in the Dubai for migration purpose or to find job opportunities [6]. Therefore Dubai government not only have to fulfill the need of their own citizens but also the need generated by the increase of migration and expatriates. In accordance with the records only the guest of the hotel in 2005 was 866 thousand when the actual population of Dubai was 1321453. However, in accordance with the records total passengers reached at the Dubai Airport in 2017 were 36.9 million.

Figure 1Supply of residential apartments from 2013 to 2018

In accordance with the above-mentioned graph total apartments provided for sale from 2013 to 2018 are almost 1582 thousand [6]. In accordance with the statistical data total 24698 hotel apartments were made in 2017 to meet the demand of the increasing real estate need in Dubai. However, more than 7000 residential units were also developed in an only 2^nd quarter of 2017. While in only 2016 total sales and mortgage transactions made for the residential and commercial areas of real estate are recorded as 20753. However, the following graph covers the comparative analysis of the supply and demand in Dubai from 2007 to 2010 [1]. 

Figure 3Supply and Demand for real estate from 2007 to 2010

Elasticity of Real Estate in Dubai

           Real Estate of Dubai is improving and projecting positive growth trend. people from other countries are also now purchasing property in Dubai to get economic benefits. Wall Street Journal Article presents that total income earned from offering the real- estate syndicated loans and bonds Dubai earned 4.9 billion dollars in 2008. While in accordance with the analysis elasticity quotient for the demand was greater than 1, therefore, we can conclude that demand is elastic as the prices are continuously increasing in Dubai but the demand of property is not decreasing. A major reason for this can be increased in per person income. While on another side, the supply of the real estate is not elastic as it can be considered as zero elastic because no changes are because of increase in the prices supply was not decreased. Because of the highly increasing demand of the real estate in Dubai prices of the real estate is also increasing as in 2013 Dubai presented that Apartment prices in that year rose by 42%. While research conducted by Hepsen and Vatansever in 2011, elaborate that in 2008 real estate contribution in the real Gross Domestic Product (GDP) was recorded as 14.73% even when the whole world was facing financial crisis. prices of the property were going to increase day by day but demand trend for the property was increasing in the records that show that demand of the real estate is elastic in real meaning for the Dubai real estates. 

Market Competition of Real Estate in Dubai

            While if we take the market analysis of the Dubai in comparison to the other areas of the Middle East we can that Dubai is leading the market of real estate as the development made by the Dubai is many times more than the development of other areas of Middle East in these years. Increasing demand factor also causes to increase competition in the internal market of Dubai. Comparative analysis of the private sectors and government in Dubai indicate that during last few years Buildings (including residential and commercial real estate properties) established by the Private sector are many times more than the building established by the government sector.     

Metronomic analysis and tackling a policy or market issue

             Macroeconomic analysis helps out the government and regularity authorizes to develop right decision and policies for that field. For instance, in the field of real estate development current analysis of the demand factor, can help out the government or regularity authority to develop new plans for the supply of real estate properties. If the demand is increasing because of increase in population or other factors then the government have to plan to boost up their supply also otherwise people will face residential issues and the total number of homeless people will be increased in response to it. A practical example of it is mentioned below in the graph [7]. 

References of Real Estate in Dubai