TBY talks to Nick Maclean, Managing Director, CBRE Middle East, on the sector.

Nick Maclean

What is driving the growth of the middle-income market?

It is important for the country's population to grow and establish roots in Dubai. Therefore, the government is keen to provide them with the opportunity to do this. The middle-income buyer market is strategically sound and it is important to generate long-term residency here in the UAE. For the rental market, it is important because the economy relies on providing the facilities and environment to make the economy work. This issue is not a UAE-specific one but an international issue that is relevant to all markets where real estate is a component of the total economy. After 2008, there was a significant decline in the value of both capital and rental. It recovered in the second half of 2012 to 2013, but that recovery outstripped salary increases. Therefore, we are seeing tenants being more flexible. Tenants are prepared to move for better value accommodation, which is manifesting in the migration of tenants to outskirts of the city. Consequently, rents will continue to decline until we get a level of integration that matches the supply of new stock coming into the market over the next few years.