Iran Crisis -Effects on the dubai property prices

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Hi,

For everyone who has been investing in the dubai property market...do you think that the current uncertain Iran crisis will have an effect on the dubai property market in the coming months?

We know that the tensions between Iran and the US have been steadily escalating for the last few months and today there is news that Kuwait will begin evacuation drills to prepare for any emergencies because of a possible threat of war.

Though I have several investments in dubai and was planning on expanding them further...Would it be sensible to hold back property investment for sometime and stay in a watchful waiting period, until things calm down politically?

IMO, if there is some sort of political unrest or prolonged uncertainity in the gulf region, it will have a negative effect on the property prices in dubai. It might even force some people/companies to review their plans of living/operating in Dubai and in turn, disturb the Demand & Supply dynamics.

Is there a cause for concern or am I just being plain paranoid? Please share your opinions.

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[dubaizone]

Hi,

For everyone who has been investing in the dubai property market...do you think that the current uncertain Iran crisis will have an effect on the dubai property market in the coming months?

We know that the tensions between Iran and the US have been steadily escalating for the last few months and today there is news that Kuwait will begin evacuation drills to prepare for any emergencies because of a possible threat of war.

Though I have several investments in dubai and was planning on expanding them further...Would it be sensible to hold back property investment for sometime and stay in a watchful waiting period, until things calm down politically?

IMO, if there is some sort of political unrest or prolonged uncertainity in the gulf region, it will have a negative effect on the property prices in dubai. It might even force some people/companies to review their plans of living/operating in Dubai and in turn, disturb the Demand & Supply dynamics.

Is there a cause for concern or am I just being plain paranoid? Please share your opinions.

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The way i see it - Iran gets tensed, Iranians get worried about their money and start moving their money out of Iran into other markets. Best place to move money is obviously within the region because Iranian money in western markets is never safe - even if it is the Iranian investor will always be hesitant. Best place to invest it right now is in Dubai since this is an Arab country and ofcourse a safe haven for investors. If i was Iranian i would be looking to move my money out of the country and would be happy if i could just 'park' it somewhere safe....forget about getting crazy returns on my investment. So my theory is if there is a war breaking out in Iran - be prepared for a lot of Iranian investors moving their money to Dubai which will only drive the property prices further up.

See - the more insecure the region gets the more people look to Dubai as a safe haven. All we have to pray and hope for is that Dubai continues to maintain its neutral / unaffected status amidst all the regions conflicts.

 

[Wannaberich]

The last thing I'd be worried about is a war between Iran and US.On top of Iraq,Afghanistan,the last thing the US want is another war,forget it.
The American public just wouldnt except it plus the Iranians would be able to give the Americans a good battle which would be very bad news.
Personally I'd be more worried about oversupply as to whether or not I would invest in Dubai.

 

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Thanks Dubai Zone & Do Buy for some interesting insights on the situation. Just to take this discussion further:

Dubai Zone - Though we all pray that this does not happen but just for discussion sake in a scenario where there is pressure on Iran from US or a highly unlikely US Attack happens, would it really help the Dubai Market if the Iranians would move all their money to Dubai, as you suggest? Wont there be an impact on the real estate prices of a country amidst a war region irrespective of where the Iranians would move their investment interests?

We all love Dubai for several reasons such as being safe, tax free, a sought after tourist and shopping destination and these are some of the reasons which have caused the property boom in the first place. In a political crisis, such as the one we are discussing, would it still be a lucrative place for people to relocate to, is the question that comes to my mind.

As we all know, the balance in demand & supply predictions are based on X% of people moving to Dubai to swallow this massive ongoing construction supply. Well if the reasons for moving to dubai or staying in dubai change for a lot of people then I think property prices are bound to come down with plenty of properties but no buyers.

Ofcourse this discussion could possibly turn into a serious political debate of whether or not there could be a possible attack. But not getting into that, my purpose to start this thread is to hear the opinions of the many investors/analysts on this forum on how seriously do they take this war threat while planning their investments? Or is it not a factor for them to consider when buying and selling property in dubai? Is there any chance that though nothing would actually happen but just the uncertainity of the whole situation, mixed opinions on the war will dampen the demand in the coming months?

Any thoughts?

 

[Wannaberich]

There has been speculation for months and months over action by the US and this has had zero effect.
Anyway,why should a war,if it happened have any impact.No bombs will be falling on Dubai so whatever happens a few hundred miles away I dont see why it should have an impact.
Dubai is not like Israel or Saudi Arabia,ie,places that could get sucked into a war.
Dubai is small and insignificant.

 

[Roshan]

Hi,

For everyone who has been investing in the dubai property market...do you think that the current uncertain Iran crisis will have an effect on the dubai property market in the coming months?

We know that the tensions between Iran and the US have been steadily escalating for the last few months and today there is news that Kuwait will begin evacuation drills to prepare for any emergencies because of a possible threat of war.

Though I have several investments in dubai and was planning on expanding them further...Would it be sensible to hold back property investment for sometime and stay in a watchful waiting period, until things calm down politically?

IMO, if there is some sort of political unrest or prolonged uncertainity in the gulf region, it will have a negative effect on the property prices in dubai. It might even force some people/companies to review their plans of living/operating in Dubai and in turn, disturb the Demand & Supply dynamics.

Is there a cause for concern or am I just being plain paranoid? Please share your opinions.

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War brings a certain amount of uncertainity but Dubai has sustained all of this. We had the Iran-Iraq, Kuwait-Iraq, U.S-Iraq war. Dubai was not affected by all this.

I presume the same will apply for the future also.

Regards

Roshan

 

[Wannaberich]

War brings a certain amount of uncertainity but Dubai has sustained all of this. We had the Iran-Iraq, Kuwait-Iraq, U.S-Iraq war. Dubai was not affected by all this.

I presume the same will apply for the future also.

Regards

Roshan

Altough I don't think a war will effect Dubai,these wars you mentioned happened
before the Dubai property boom.

 

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After reading the several opinions on this thread as well as of other people on similar forums....it seems that most are of the opinion that the Dubai real estate market will stay unaffected from any unrest in the region or even in an unlikely scenario of Iran/US War...so that makes sense.....

but I guess thinking that it would have a positive effect on the market since all the Iranians would move their investments to Dubai, seems a little far fetched. Maybe some would move their investments into dubai properties but it will really have to be a substantial number to cause a further property boom in the market..

so for now..investing as usual!

 

[Roshan]

Altough I don't think a war will effect Dubai,these wars you mentioned happened
before the Dubai property boom.

Agreed, but it did not affect Dubai's economy at that time and I presume it will not affect it now.

Regards

Roshan