Dubai has one of the fastest-growing economies – targeting a GDP growth of 3.8 per cent during 2020
UAE-based residential, hospitality and commercial property developer Seven Tides has indicated Dubai’s property market will start to recover in 2020, driven by Expo 2020, new government initiatives, favourable payment plans from developers and growing flexibility from financial institutions.
The emergence of this recovery was first evident in the final quarter of 2019, with close to 5,000 real estate transactions recorded in October, the highest number of property sales since 2008, according to Dubai Land Department statistics compiled by real estate portal Property Finder.
Dubai has one of the fastest-growing economies – targeting a GDP growth of 3.8 per cent during 2020 - and an increasing population which is estimated to reach over 2.8 million this year and 3.4 million by 2030. These factors combined with political stability and diversity are just some of the reasons why Dubai remains an attractive place for regional and international investors over both short and long term.
Abdulla Bin Sulayem, CEO, Seven Tides International, said: “With Expo 2020 now only nine months away, Dubai alone is gearing up to welcome more than 14 million overseas visitors during the event. The stimulus of the mega-event, which will yield an investment windfall of Dh122 billion/$33.2 billion (an average Dh12 billion/$3.2 billion per annum over the next decade) as well as creating around one million jobs over the same period is expected to positively impact the overall property market in the emirate.
“However, the lasting legacy of Expo 2020 when measured against Dubai’s property market, will only be truly realised when international visitors return to Dubai, to invest, live and work here over the medium to long-term.” he highlighted.
Property prices have been under downward pressure over the last few years – and, undoubtedly oversupply has continued to hamper recovery. Overall residential stock is expected to reach 637,000 units by the end of 2020, correlating to more than a 10 per cent increase in recent years.
However, last year, to address the balance between supply and demand, a real estate planning committee was established in Dubai. The committee has been tasked with regulating the sector and developing a clear and deliberate strategy to ensure real estate projects are not duplicated and that they add real value to Dubai’s economy, as well as ensuring that small private developers are not competing directly with larger semi-government real estate companies.
“Despite ongoing concerns about supply and demand dynamics, it is important to understand that competition in itself is very healthy, and as a result one of the primary aims of the newly formed committee will be to enhance the competitiveness of the real estate sector as a whole – continuously encouraging developers to come up with new and innovative projects that make Dubai, and indeed the UAE, stand out in the global property market,” added Bin Sulayem.
In recent years the market, and of course technology, has matured. Today, we are in a digital age of transparency. Investors are well researched; they take their time and weigh up their options. As a result, developers need to be more creative in order to continue selling their projects at a premium, developing residences that truly appeal, not only to investors, but to end users too.
“So, the overarching message this year for both developers and investors alike, is that the residential market outlook for Dubai in the medium to long-term looks very positive indeed, especially if the government, the banking sector and developers work in harmony,” commented Bin Sulayem.
“The government can continue to aid the recovery of the market by introducing new and innovative regulations, initiatives and, of course, infrastructure, while banks can support with competitive interest rates and easing loan requirements. And, developers for their part need to focus on delivering quality developments in prime locations with unique features which are competitively priced and offer attractive yields – finding the right balance will secure Dubai’s position as a preferred property market in 2020,” he said.
