Investor and entrepreneur Rajesh Sawhney has warned that Dubai’s real estate market is in a “super bubble”, surpassing the speculative growth in Indian cities like Gurugram. Sawhney and other financial experts have expressed concern that property prices in Dubai and major urban markets in India have become extremely inflated, and this bubble could burst at any time. While UBS has described the “bubble risk” in Dubai as high, Fitch Ratings has predicted ‘modest recovery’ in 2025-2026.
,DubaiIn a post titled ‘Real Estate Super Bubble’, Sahni revealed that he spent some time with his cousin, who has been an astute investor in Dubai real estate.
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Rajesh Sahni shared an important investment lesson that he learned on two different occasions.
Referring to his cousin’s investment advice, Sawhney wrote – “He advised me, ‘Never invest in anything more than 100 kilometers from where you live.'” According to Sawhney, this advice reminds him of his first meeting with veteran investor Mike Moritz of Sequoia Capital in 2002. At that time, Moritz had explained his investment philosophy by saying – “Sequoia does not need to invest in any startup outside the Bay Area. They will invest only up to San Francisco at the most.”
Situation of real estate markets of Dubai and India
It has been said in the report that construction work in Dubai is now reaching around the level of 2017. Also, there is a fierce competition going on between Dubai, Abu Dhabi and Riyadh to attract foreign real estate investment. UBS, a major financial company, says that Dubai’s fundamentals such as population growth and government regulations remain strong, but now “the risk of a bubble has increased significantly.” This means that prices can fall drastically at any time.
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Dubai warns of ‘reform’
Fitch Ratings, a credit rating agency, also warned in May. He says property prices in Dubai will see a “modest recovery” between late 2025 and 2026, after peaking this year. However, he also said that this decline would probably not exceed 15%, and banks and construction companies would be able to absorb this change.
Gurugram In ‘House of Cards’
In India too, concerns are growing about the increasingly expensive housing market in big cities. Real estate expert Vishal Bhargava recently described Gurugram’s property boom as a “house of cards”. He has warned that there is too much betting going on here. He says that the rise in house prices since 2021 is less due to real need and more due to ‘dangerous speculation’.
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Buying property in metro cities is the ‘biggest mistake’!
Hedge fund manager Akshat Srivastava says that buying property in India’s metro cities can prove to be a costly mistake. Last month he wrote that “buying property in an Indian metro is going to be one of the worst mistakes you can make.” According to him, there are three main reasons for this. They believe that the entire market is in the hands of builders, due to which you have to buy very expensive. Excessive construction is taking place in cities, due to which there is a lot of pressure on the infrastructure. Due to these infrastructure problems, these big cities are gradually becoming unliveable.
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