Dubai Real Estate Forecast: $82bn projects to be completed by 2020

Dubai will complete an estimated AED301 billion ($82 billion) worth of projects in the areas of housing, entertainment and infrastructure by 2020, a new report has said.

These large scale developments will create immediate demand in the work force, reducing the current occupancy rates of housing stock, said Reidin's report entitled Dubai: Tomorrowland.

"We extrapolate that the number of jobs created in the real estate sector will rise by approximately 60 percent in the next five years," Reidin said.

The construction boom comes as Dubai prepares to host the prestigious World Expo event in 2020. At its peak, the Dubai Expo 2020 exhibition site at Dubai Trade Centre-Jebel Ali is designed to accommodate up to 300,000 visitors, with average week-day attendance expected at 153,000.

Running October 2020 through April 2021, the Expo will launch the country’s Golden Jubilee celebration and serve as a springboard from which to inaugurate a progressive and sustainable vision for the coming decades.

"We opine that as these jobs are created, there will be a mismatch between the sectors where the jobs are created (predominantly at the mid end) compared to the topography of the real estate, which is skewed towards the higher end," it added.

The report said that given the large supply pipeline of these large scale projects, and the demand-supply mismatch, it is likely that prices in the mid end of the market will remain relatively firm as upward pressure is created.

It added that private sector developers are likely to respond by skewing supply dynamics towards this sector, a trend that is already underway.

-

Roots Land Real Estate is your property partner in the U.A.E. We are committed to assisting you with the entire process of purchasing or selling your desired property. Our experience in Dubai and Abu Dhabi?s property markets has provided us with invaluable insight that is largely beneficial to investors.

Learn more about http://www.rootsland.com/

On the contrary: Dubai property slump due to tighter rules, not oil plunge

The firmer grip on real estate in Dubai has the whole sector moving to a screeching halt according to experts. Preventing a housing bubble is a priority among policymakers and it is causing a slowdown in the emirate's real estate sector rather than dropping oil prices. However, it’s still a contributor.

Dubai, compared to other emirates, has a low reliance on oil despite providing three-quarters of the nation’s consolidated revenue in 2014, according to credit agency Moody's.

"Dubai residential property sales have declined over the past three quarters, but the drop in oil prices is coincidental and the slowdown is more due to big price increases in 2013 - the market is adjusting to return to affordable levels," said Nicholas Maclean, managing director of consultants CBRE Middle East.

"This is a positive trend and will help prevent a bigger correction in the future."

While housing prices are expected to loosen up this year, some experts said that well-balanced supply and demand for properties should keep prices stable.

Last year, Dubai doubled property registration fees and the UAE federal government raised the minimum mortgage deposits, dampening demand.

"The government was right to act to curb speculation. It's just that these measures have now coincided with a weakening global economy," said Faisal Durrani, head of research at property consultants Cluttons .

The impact of the new rules on house sales has been acute, said Durrani, predicting further declines in prices in the second half of 2015.

They forecast about 20,000 new residential units will be completed and handed over from now until 2017, while Dubai's population is expected to increase by 400,000 over the same period from 2.4 million at present. About 41,000 units have been announced this year.

"Unit delivery and population expansion seem well matched, which indicates the residential market should be pretty stable," added Durrani.

But prolonging the oil plunge can lead to serious consequences on UAE real estate. The government, being the main real estate facilitator through infrastructure spending, is still heavily reliant on petroleum-based income.

"Oil is likely at unsustainably low prices - we should see a rebound, which will substantially increase government revenues in the medium term, but the question is when will that rebound happen" CBRE's Maclean said.

The Effects of Real Estate Laws, Policies, and Regulations in Dubai

Since the introduction of the Real Estate Regulatory Agency (RERA), set up to monitor, control and register all transactions in the emirate, the real estate market has began to stabilise.

The Strata Law, introduced in 2010, provides more accountability and transparency from developers with the Dubai Land Department publishing daily transactions on their website to allow extraction of price data for comparisons to previous years and other locations. RERA also introduced Ejari, a digital system where all lease contracts for Dubai properties are recorded. This looks to defend tenants and landlords with legal rights and provides a more accurate rental index.

These additions and improvements have bolstered the market to strong recovery starting 2013. The added enthusiasm of the Expo 2020 doesn’t hurt the cause either. Also, controls were put in place to protect from over-saturation of the market. The mortgage cap law introduced a maximum loan-to-value (LTV) ratio of 75 per cent and Dubai Land Development registration fees were doubled to 4 per cent.

This has made the real estate market in Dubai more stable, and therefore more predictable in the short and medium term. Transparency of performance offers investors insight on the market health to help in trying to gauge future trends. Most experts feel that this stability offers both buyers and sellers the benefit of a calmer property market where decisions can be made in a much less rushed fashion than before.

As the market progresses, developers earn their reputation based on their track record, which are stringent on delivery and stock market performance over time. It gives today’s buyers the benefit of seeing a developer’s previous work.

Purchasers now buy with increased confidence, and are willing to pay a premium for names that they trust. Consumers have increased choice by way of location, design, specification and payment plans. Developers are also more experienced to deal with any unexpected changes in the market.

Some relatively new neighbourhoods are already developing their own identity and enjoying the delivery of increased services and infrastructure. This provides potential purchasers with the valuable advantage of having everything in place and knowing what an area is like before they buy.

All stakeholders can now enjoy the benefits of being more aware and responsible in their decision-making. Laws have been passed to ensure safer transactions, increased clarity and improved protection to all involved.

While this next phase may not offer the types of spectacular financial gains enjoyed by some of the early pioneers, it certainly offers the advantage of maturity.

Roots Land Real Estate

The Most Trusted Company in Real Estate Dubai

Roots Land Real Estate helps people look for properties in Dubai, UAE. Designed as a marketplace for properties in Dubai, Roots Land Real Estate offer consultancy and professional help in buying, selling, renting, and investing in residential or commercial properties in Dubai. Find sprawling townscapes and houses, luxury villas, and strategically-located apartments, along with the property’s agent and contact details under one domain with Roots Land Real Estate.

Having a “people first” philosophy, Roots Land Real Estate knows a real estate tool that truly serves its purpose includes constant technological utilisation, as well as putting its people’s welfare in mind. This allows the company to have a well-balanced synergy between proactive people, and a useful website. Roots Land Real Estate prides in providing a blend of customised services for each person’s needs, while incorporating established technological practices that are proven to deliver results.

Buying and selling properties in Dubai and Abu Dhabi is now easier with Roots Land Real Estate. With search functions that include results organised by price, location, and property type, looking for the perfect property has never been easier. Also, Roots Land Real Estate offers valuation and consultancy services, which helps significantly to individuals, or even companies that aim to market their to the right audience.

Contact Information


Business Name: Roots Land Real Estate

Address:  Suite 1310, 13th Floor Grosvernor House Commercial Tower Sheikh Zayed Road, Dubai, UAE

Tel #: +971 4 329 8333
Fax: +971 4 329 8997
Email: info@rootsland.com
PO Box: 215273

 

Projects of Roots Land Real Estate:

Roots Land Real Estate has a formidable array of clients using its platform. With trusted names in luxury living spaces under its belt, Roots Land Real Estate’s reputation in the properties buying and selling industry is something to be reckoned with. They are currently partnered with the most recognised luxury property brands in Dubai, making it easier to own branded residences through Roots Land’s very useful website. These properties are located at the heart of Dubai’s sprawling metropolis, situated strategically in the middle of urban developments in Dubai for active individuals.