Factors leading to the explosion of consumer market in Dubai

Many residents of Dubai and Abu Dhabi register their concern regarding the rising rents coupled with the utility costs and are of the view that the current trend may lead to inflation across the Emirates. The prices of the luxurious residencies are increasing by the day as people are moving to the secondary localities of Dubai where accommodation is economical.

According to a report submitted by Bayut.com, online property portal, the rising population and tourism spelled a rise in consumers and the markets which were once scarce of shoppers are now flooding with customers. Despite the fact that the increasing prices are seen to be as a boon for the investors but for the consumers it is a different story. More than half the consumers are worried that the rising cost of living, depicted as optimism about a consolidating economy, might be tempered by tinges of inflation.

According to a survey conducted by the Dubai Department of Economic Development during the first quarter of the year, a 16 per cent point jump was witnessed in consumer optimism about the economy 74 per cent in the end of the second half of last year to 90 per cent in the first quarter of the current year. The rising living costs were also perceived as a matter of worry for 54 per cent of the correspondents.

It was also observed that the cost of medical and health care fell 0.2 per cent during the month of July and the cost of furniture fell 0.1 per cent whereas the cost of mobile phones fell 0.7 per cent. The cost of clothing and footwear also saw an increase of 0.1 per cent and the price of poultry fell 1.5 per cent. Surprisingly the Dubai agency reported that the food and drink prices rose to 2.3 per cent over the year till the end of July but fell by 1.3 per cent as compared with the end of August.

The rents in Dubai increased by 7.5 per cent especially between June and August and interestingly more than 30 per cent over the past year as seemingly driven by the rapid increase in accommodation prices even in the secondary locations like JLT and Dubai Sports City. Similarly, according to data released by the National Bureau of Statistics, the residential cost across the UAE rose 0.4 per cent over the year. The bureau also reported that the housing rent escalated to 0.07 per cent in the month of July alone.

After the unfortunate boom and bust cycle which was witnessed in 2008 and continued till 2010, UAE tried its utmost in regaining the lost throne of prosperity which it once enjoyed and to do so it devised many methods which included safeguarding the investors' interests and creating job opportunities. So with their investments secure, many businesses started developing in the Emirates and as a consequence a number of job opportunities emerged for people around the world.

Naturally, as it is said that where there is sugar there will be ants, therefor it would be quite prudent for one to deduce that the new job opportunities attracted a lot of people and UAE saw a thorough rise in population. With the adequate rise of population constituted by people around the world the goodwill of the emirates continues span across every corner of the globe.