There is “no need to worry” about property oversupply in Dubai or that the emirate is growing too quickly, according to emerging markets veteran Mark Mobius.
Speaking at the Financial Times’ Global Financial Forum in Dubai on Monday, Mobius – the founder of Mobius Capital Partners LLP – said that he is unconcerned that Dubai is overbuilding and that many buildings are largely devoid of residents.
According to Mobius, oversupply is a natural part of economic cycles.
“In any growth situation, you’re going to get ups and downs. You are going to get overbuilding and over financing. Then you’ll have a correction, and you start the cycle all over again,” he said.
Mobius added that “the important thing to remember is that in these cycles, the peaks get higher and higher, because you’re building a larger and larger base.”
In his remarks, Mobius – who spent three decades at Franklin Templeton investments – said that he owns a number of apartments in Dubai.
“Rents have gone down, but that doesn’t concern me, because I know that going forward the overbuilding will stop. There will be a filling up of these apartments, and we’ll start the cycle again,” he said.
“I don’t think we have to be too worried about it. You can’t really prevent that. People are optimistic and they invest, then over-invest and overdo it. It’s part of the cycle.”For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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