First Published: 2017-09-14

Dubai hopes Expo 2020 breathes new life into property sector
Six-month event expected to attract up to 300,000 visitors per day in attempt to boost property market hit by downturn since 2014 slump in oil prices, but not everyone is optimistic.
Middle East Online

An artist impression shows Al Wasl Room at the centre of Expo 2020

DUBAI - Dubai's glitzy property market, hit by a three-year downturn, is regaining momentum as the emirate prepares for its Expo 2020 trade fair, analysts and developers say.

The six-month event, the first World Expo to be staged in the Middle East, is expected to attract up to 300,000 visitors a day when it opens in October 2020.

Officials are hoping it will breathe new life into Dubai's property market, under pressure from weak demand and low economic growth since a 2014 slump in oil prices.

"Our real estate market is preparing for a new phase of growth in the run-up to Expo 2020," Sultan Butti bin Mejren, director general of Dubai Land Department, told a press conference.

Undeterred by lower rents and sale prices, developers launched new projects worth tens of billions of dollars at a Cityscape Global property show which ended on Wednesday.

Top property developers including Emaar, Nakheel and Deyaar reported strong sales at the three-day event, attended by 300 firms. Some claimed to have sold out.

Sales of properties in Dubai rose rapidly in the years after the market was opened to foreigners in 2002.

Prices soared as investors piled in, but when the global financial crisis hit the debt-laden emirate in 2009, it sent them into free-fall.

A recovery led by tourism, trade and transportation pushed prices up again between 2012 and 2014.

But in 2014, a glut in oil production slapped down the price of crude, hitting the Gulf economies that underpin Dubai's real estate sector.

Prices for homes in Dubai have since dropped by over 15 percent and rents have fallen even more.

Faisal Durrani, partner-head of research at Cluttons, a property consultancy, said that prices in most parts of Dubai had now stopped falling.

"It actually looks like we started to get to the bottom of the cycle and the catalysing factor is Expo 2020," Durrani said.

He said the fair was expected to generate as many as 300,000 jobs by 2020, boosting demand for real estate.

- 'Vacancies rising' -

Not everyone is as optimistic. Some observers expect prices to continue falling as more companies cut back on Dubai-based staff.

Layoffs, "along with weak job growth and a ballooning supply of properties, are driving a drop in values", said Phidar Advisory, a Dubai-based property think-tank, in a report this week.

"Sale volumes of completed properties are at a six-year low and vacancies are rising across the city," reaching 35 percent in some districts, it said.

That has forced developers to offer incentives like improved payment terms to lure buyers, especially foreigners.

Between December 2015 and June 2017, overseas investors put up as much as $41 billion to purchase property in the emirate, the Dubai Land Department said last month.

Indians topped the list of foreign investors with $5.6 billion, followed by Saudis who pumped in $3.4 billion.

But real estate developers are talking up the opportunities.

PNC Menon, chairman of Sobha Group -- a large property firm in the subcontinent and the Middle East -- said he believes the real estate market will not go back into decline for at least the coming three years.

"It is a mature market... Prices will remain the same," at least in the coming three years, he said.

Sobha Group presented two projects at Cityscape, valued together at over $12 billion, one of them in the sprawling Mohammed bin Rashed City near Burj Khalifa tower, the world's tallest.

Cluttons has forecast that developers will complete as many as 90,000 units by 2020, mainly driven by the recovery.

But Dubai-based real estate services firm Asteco said apartment prices fell seven percent year on year in the first half of 2017.

In a report, it said it does not expect a recovery until economic sentiment improves on the back of a rise in oil prices.

 

UN Security Council warns against holding Iraqi Kurd vote

Barzani delays Kurdish independence vote announcement

Iran defies US, tests missile

Yemen leader promises UN to open entire country to aid

Saudi Arabia marks national day with fireworks, concerts

Saudi intercepts missile fired from Yemen

Turkey warns of 'security' steps in response to Iraqi Kurd vote

Syria's war off the radar at UN assembly

For many Iraqis, tradition trumps police

Darfur clashes kill 3 as Bashir urges reconciliation

Saudi cleric banned for saying women have ‘quarter’ brain

Veteran Syrian activist, daughter assassinated in Istanbul

Tunisia drops forced anal exams for homosexuality

Bomb used in Saudi-led strike on Yemen children US-made

Syria Kurds vote to cement federal push

Police charge teenager over London Underground attack

Nigerian official to meet Turkish counterpart over illegal guns

Thousands feared trapped in Raqa as IS mounts last stand

Iraqi forces achieve first step in new offensive on IS

Migrant boat sinks off Turkish Black Sea coast leaving four dead, 20 missing

Trump praises 'friend' Erdogan

Rouhani vows Iran will boost missiles despite US criticism

Russia clashes with EU over Syria

UN sets up probe of IS war crimes in Iraq

US, Iranian top diplomats confront each other for first time

Air strikes kill 22 civilians in northwest Syria in 48 hours

Iranian supreme leader lashes out at Trump UN speech

Thousands of Huthi supporters mark 3 years since Sanaa takeover

Iraq attacks all remaining IS territory at once

Moscow accuses US of hitting Syrian regime forces

Turkey jails lawyers representing hunger striking teachers

Turkey, Iran and Iraq make joint threat against Kurd vote

Syrian Kurds to hold first local elections in federal push

Qatari expats lauded as statesmen by Arab critics

Shipwreck off Libyan coast leaves over 100 migrants missing

Will Turkey’s opposition to Kurdish state translate into action?

US ups the ante on Iraq Kurds

Macron: Iran nuclear deal no longer enough

Trump’s mind made up on Iran but refuses to divulge

Scores of Iraqis missing during war against ISIS

Netanyahu rejects calls for mixed gender worship at Western Wall

Russia accuses US of missile treaty breach

Iran TV translator mocked for watering down Trump speech

Saudi Arabia hopes Kurdish referendum will not take place

Saudi invites women to sports stadium for first time