ACADEMIC LITERATURE: Billions of dollars have been spent on building the astonishing city of Dubai. Real estate construction worth billions of dollar is complete or is in the process of completion. It is a product of combined strategies of local businesses and innovative marketing. The projects include hotels, offices, entertainment complexes and huge shopping malls. The construction of landmark buildings and the city’s love for superlatives has placed it on the world’s property map. A big catalyst for the growth has been the government’s decision to allow expats to hold property in the city. But the sustainability of this growth remains an open question. (BAGAEEN, 2007) The close link between the real estate market and the financial market cannot be denied. Real estate prices indicate the financial health of the market and play a very important role while framing the monetary policies. The cyclical movements of the macroeconomic factors may lead to the price fluctuations in real estate. (Dr. Eisa Abdelgalil) The real estate market is characterized by extreme heterogeneity due to the location and physical attributes of a property. The rise in housing prices can be attributed to the Baby Boom generation entering the residential market. Volatility in the housing market are driven by factors other than demographic variables. Residential and commercial properties differ in dynamics and return properties. The decision of a household to buy a house in not only driven by the investment perspective but also by the need for a housing unit. But that is not the case with investors. There are various demographic factors taken into consideration like: population growth, percentage of population within a certain age, income and employment va... ... middle of paper ... ... about how the country’s Central Bank could consider tightening rules if increase in real estate prices continue. (Watts, “IMF forecasts UAE economic growth at 4.5% in 2014” , 2014) Additional infrastructure would be needed to deal with 25 million people visiting the country for the 6 month event. A special company has been created to manage the creation and operation for the EXPO 2020. Supporting facilities that need to be developed before the EXPO include development of Exhibition City (a 438 hectare) ,completion of Al Maktoum airport, Expansion of Jebel Ali port. There would be Private investment in hotel, housing and commercial agencies and the demand for housing, power supply and water demand would rise sharply. Investment is expected to quicken Dubai transport system. EXPO is expected to add 1.5 % to GDP every year to Dubai’s real GDP in 2014-20. (O'Sullivan)
The demonstration in this research is simple and the resources are not rich enough. The query to the relevance between the monetary policy and the house bubble still has not been answered. The level of effect the monetary policy made to the financial crisis is still has not been assessed.
After analyzing a sample of 40 gulf view condominiums and 18 no gulf view condominiums it becomes evident that variations exist between the two different types of properties. When reviewing the data it becomes clear that luxurious gulf view condominiums can fetch larger selling prices and are listed on the market for fewer days than no gulf view condominiums. No gulf view condominiums fetch lower selling prices and sit on the market for longer periods of time since they are not as popular as condominiums that have wonderful views of the gulf.
The housing market is very unique as unlike other goods and services, houses have permanence, it is a fixed location good causing the rules of supply and demand to be taken to new extremes. In the case of the Toronto housing market we can view in almost real time the role supply and demand play on he ever increasing house prices, additionally the fundamental economic issue of scarcity is made extremely apparent by the limited size of the city of Toronto.
“The housing market will get worse before it gets better” –James Wilson. The collapse of the United States housing market in in 2008 was one of the most devastating moments for the world economy. The United Sates being arguably the most important and powerful nation in the world really brought everyone down with this event. Canada was very lucky, thanks to good planning and proper preventatives to avoid what happened to the United States. There were many precursor events that occurred that showed a distinct path that led to the collapse of the housing market. People were buying house way out of their range because of low interest rates, the banks seemingly easily giving out massive loans and banks betting against the housing market. There were
With jobs and opportunities scarce, many were forced to return to school or take refuge by moving back in with their parents. The idea of buying a place of their own seemed impossible. This is one of the factors that could decrease homeownership among the generation. Another factor that could decrease homeownership is that the housing market itself faces powerful headwinds. Changes in demographics and in the industry have held back demand and supply. Neither is likely to be unleashed any time soon. The last three years of recovery and job growth have raised hopes that millennials will soon be crowding open houses and kicking the slow-moving home-building industry into higher gear. A resurgence of residential construction would provide a big lift at a time when the recovery has lost momentum because of economic turmoil abroad. This can increase the homeownership among the generation. Millennial-generation home buyers have not emerged in expected numbers, in part because they are staying single or getting married and having children later in life. The share of 18- to 34-year-olds who are married and with kids has fallen steadily to 20% from almost 50% in 1970. That means fewer people feel compelled to go out on their own or move out of apartments they share with friends and other roommates. For whatever reason, millennials are also staying
People commonly believe that property values decline when blacks or non-whites move into a neighborhood. However, the real reason why property values decline is because of whites moving away and taking their resources with them. White homebuyers fear that property values will decline rapidly when nonwhite residents begin moving into a neighborhood. What they do not take into consideration is that the nonwhite residents may be their socioeconomic equals. Instead, they focus on race—they categorize individuals into socioeconomic classes on the basis of race.
The basic cause of the financial crises falls collectively on debt and mortgage-backed assets. Since the Great Depression the property prices in the U.S. were always steadily incr...
In an economy recently plagued with housing market crashes and financial crisis, we can easily see the vital functions that a monetary policy has on anticipating and preventing instability in our economy. Understanding how monetary policy works and how it’s affected by either rules or discretion is crucial, and all aspects must be taken into account to establish the most effective choice for our economy.
Most people, today, are looking forward to buying their first property. When individuals decide to buy a house those individuals would have to look at all their options and all the advantages and disadvantages that come from purchasing a house. The economy plays a huge role in the decision whether people will purchase a house, purchase a condominiums, or rent property.
In order to understand the concept of financialization and the housing market on the global and local level, one must know that there is a global pool of money that is simply the worlds savings bank. In 2000 the pool had $36 trillion and has since doubled in size (Blumberg 2008). Its most recent profit increase was a result of developing countries and cities such as India, Abu Dhabi, and China making money. This doubled the cash pool available for investments, but left fewer solid investments for the taking. The solution was residential mortgages and the US housing market. The investment managers thought the low-risk high-return investment in the housing market was a good, stable idea. The glo...
When prices increase, the quantity decrease (Graph 1) and new firms enter the market in order to make economic profits. However this does not mean the real estate agents or brokers earn more money. On the contrary, the prices they charge may increase, but the number of houses each sell do not change (Goolsbee, 2005, Online). From this it is evident that the price of products in the real estate market is not affected by the entry of new firms.
After the crisis UAE’s economy suffered from 2008-2009 the economy has diversified itself and does not depend solely on oil anymore but also on other sectors such as tourism. The inflation rate of Dubai is 0.33% which is also significantly low (Dubai Statistics Centre,2016).The small medium enterprise does not want to take a risk where there are fluctuations in price level thereby effecting the buying power of people and also the demand and supply of the Al-Simpkin’s product. Furthermore,the government encourages foreign investment and besides the agent there are free zones such Jabel Ali which is the largest
Following the sudden increase of the dot-com bubble and the possibility of decline threatening the US management started dropping the interest rates to improve the economy. The interest-rate turned as low as 1.5% in June 2003 which was at its least possible point since 1958 (Gerding, 2009). This low interest-rate found its users in the shape of homebuyers and borrowers with the housing market at last expressing some development after period of declining movement. Indeed the rate of a thirty year unchanging mortgage in the year 2003 was the lowest in 40 years and thus the dream of owning a residence in US was becoming an incredibly simple reality for Americans (Ely, 2009). With increasing housing charges borrowers assumed th...
World Expos hold as a meeting point for people all over the world, where innovative ideas are shared and improve on issues that are internationally important, such as the global economy, or even an enhanced life for the world’s population. Expo 2020, which will be held in the heart of Dubai, will be one big step towards efficient development. The Expo will be held in the name of ‘Connecting Minds, Creating the Future.’ Their goal is to connect people and innovative ideas, leading the people of the world towards a better tomorrow. The Expo may have a gigantic effect on a country and its people, but it also has some downsides.
Samarai M.A. Qudah L.M. 2007. Planning Sustainable Mega Projects in UAE. World Housing Congress. Pg 1 – 20.