|TAP Special| Dubai should reorient its economic focus by shifting away from property and concentrate on advanced industries, a report by the Department of Finance proposed. Within the real estate sector itself, the emphasis should be changed from residential to commercial, it further said.
The paper says Dubai has learned lessons from the global financial crisis, including the importance of budget discipline and the need to regulate the property market.
In its paper, titled “The Global Financial Crisis, Lessons Learned”, the Department of Finance lists 11 lessons. Several of them are related to the property market, including the need to register real estate deals and prevent harmful speculation, and the importance of regulating the rental market to “keep it within permissible limits”.
Other lessons listed in the paper include “fiscal discipline on lending operations”, an apparent reference to the fact that state-linked companies borrowed too much before the last crisis and were forced to restructure billions of dollars of debt.
The Department of Finance also mentioned the need to monitor the economy and review development plans, and to keep the size of the public sector within “acceptable boundaries”.
Buoyed by a renewed inflow of money from abroad, Dubai’s residential real estate prices jumped more than 20 percent last year and analysts estimate they may return to pre-crisis levels next year.