Dubai real estate market sets the pace for renewed growth in the GCC

Visitors look at a scale model of Palm Jumeirah in Dubai

The hottest real estate mar­ket in the Gulf is holding up gains from the last half of 2016, records from the Dubai Land Department (DLD) show.
Its report for the first six months of 2017 indicates that Dubai real estate transactions totalled about $36 bil­lion, an increase of 16.8% from the corresponding period of last year. This was achieved through 35,571 sales, mortgages and other transac­tions, an increase of 25.9% from the first half of 2016.
The DLD report showed that land sales generated $24.8 billion from approximately 8,000 transactions, while building sales involving 3,887 transactions brought in $2.7 billion. Unit sales crossed the $8.4 billion mark.
DLD Director-General Sultan Butti bin Mejren said in a news release that the report “bears promising results for professionals in the real estate sector as, despite global economic pressures, Dubai has once again reaf­firmed its leadership of regional markets and driven renewed growth in the region.”
“The 26% increase in transactions and the 17% increase in value [cre­ate] an unrivalled success for the sector,” bin Mejren said.
He attributed the success to the emirate’s economic policies, “par­ticularly those that have contributed to the protection of all parties and the preservation of real estate rights.”
Bin Mejren pointed out that trans­parency in real estate processes provided a secure environment, allowing the sector “to grow by increasing investor confidence and heightening the appeal of Dubai’s property market.”
Emirati investors ranked first in both number and value of transac­tions during the first half of 2017, completing 4,510 transactions worth $4.1 billion. Saudi nationals were involved in 1,936 transactions worth $1.1 billion. Overall, investments by Gulf Cooperation Council citizens increased 16% compared to the same period last year, with 7,665 transac­tions worth $5.9 billion.
Industry experts project continued steady growth as the real estate mar­ket gears up for Dubai Expo 2020.
Ivana Gazivoda Vucinic, head of advisory and research at Chestertons MENA, said that, going forward from the fourth quarter of this year, “We expect the transaction activity to maintain pace and accelerate as we approach Expo 2020.”
“The two key demand drivers include residents looking to buy their own home, either from exist­ing stock or newly added affordable options,” Vucinic said. The second is “foreign investors looking at the market in Dubai due to favourable yields and future capital growth.”
“In the run-up to Expo 2020, invig­orated government spending with regards to infrastructure, hospital­ity and the retail sector will have a positive impact on the macroeco­nomic environment and will act as a key driver for investing in the market as confidence grows,” Vucinic said.
Noorul Asif, chief operating officer of Dubai-based Schon Properties, said DLD’s report was “the most authentic reflection of the current market situation, which shows that the real estate market is not declin­ing, rather growing.”
“We feel that the market has now become more real in the sense that ‘real’ buyers now talk to ‘real’ devel­opers and deals are happening due to the fact that the prices of proper­ties have come down to a more com­fortable level for end-users. This is a healthy situation for the industry that is well regulated and well-organised.”
Asif said Schon Properties’ expe­rience in development and selling properties showed there was no shortage of investors and buyers if the property, price and payment plans were right. “I think the worst for the sector is over and we can look forward to a healthy growth,” he said.
“Those property buyers and inves­tors who have made sufficient invest­ment would now be looking at prop­erties that would offer a higher return on investment. So, yes, the market is changing and there is plenty of room for everyone, especially in affordable homes, that will attract more buyers.”
Vucinic said Dubai’s realty hotspots — Dubai Marina, Palm Jumeirah and Dubai International Financial Centre (DIFC) — remained popular for those looking to invest and to rent.
“We have also seen a lot of activ­ity in secondary locations such as Jumeirah Village Circle, Jumeirah Village Triangle and Sports City. Several projects have recently been launched in these areas and are prov­ing popular with a wide client base thanks to improved infrastructure and new amenities,” she added.
N.P. Krishna Kumar
is an Arab Weekly correspondent in Dubai.

This article was originally published in The Arab Weekly.