Rising geopolitical tensions and chaos in the Middle East are booming Dubai’s economy and helping aspiring people in the tourism and construction industries make fortunes from the crisis that has pushed the region to the brink of a wider and prolonged conflict.
Since the assassination of Hamas’s political leader, Ismael Haniyah, in Iran, the threat of a full-scale Israel-Iran war is looming in the Middle East.
However, Dubai is capitalizing on this issue by positioning itself as a safe place for investment and tourism. This is not the first time Dubai has cashed in on a global crisis. In the aftermath of the coronavirus pandemic, Russia’s full-scale invasion of Ukraine, the Iraq-Iran war, the US-Iraq war, and the Arab Spring, Dubai started attracting investors in big numbers. For instance, after the start of the Russia-Ukraine war, many wealthy businessmen from Russia shifted their wealth and businesses to Dubai to avoid Western sanctions.
Currently, global real estate markets are observing a slowdown amid the fear of an economic recession, but this is not the case with Dubai’s housing market, which continues to make unprecedented strides as more people shift their capitals to the Gulf Tiger.
Just from the development sector, state-backed real estate giant Emaar Properties made $8.1 billion in the first half of 2024, which is nearly $3 billion more than what they made in the first half of 2023.
The demand for luxury villas is also rising in Dubai, with their prices rising by more than 38% in the second quarter of this year compared to the same time last year.
Dubai’s International Airport continues to be the busiest airport worldwide for international travel, as it attracted nearly 45 million travelers in the first half of 2024. Seeing the rising burden on the existing infrastructure, the city has already unveiled plans to build the world’s largest airport, with a budget of $35 billion.
An overwhelming number of people are also permanently immigrating to the city, despite rising tensions in the larger Middle East region. Almost 3.7 million people currently live in the luxurious city, with reports estimating that its population is likely to reach 5.8 million by 2040.
Despite surging economic activities, critics believe that over-optimism about the city’s economy could eventually lead to its downfall. Naysayers suggest that a large number of housing units, whose construction began in 2021, will enter the market in 2025 and 2026, which is expected to overwhelm the housing market. Reportedly, these new units could result in an oversupply and reduced demand for houses, which could ultimately slow down Dubai’s housing market and, eventually, the entire economy.
