Trends in UAE real estate market favour buyers, investors
DUBAI - Real estate developers participated in Dubai’s Cityscape Global 2019 despite last year’s sluggish demand stemming from falling global trade, a depressed oil market and lack of appetite for real estate investment.
The 19th Cityscape event over three days acted as a gateway for regional real estate investment.
While the Dubai Land Department announced that the Emirate’s real estate sector has generated investment value of more than $15.2 billion in 2019, Chris Speller, group director of Cityscape, reiterated the catalyst role Cityscape Global plays in driving the sector’s long-term sustainability.
“Cityscape Global provides a strategic platform for local and international real estate developers to display local, regional and international real estate market projects to an audience of active and engaged investors and buyers,” said Speller.
“The local property market is maturing and we see more developers becoming creative with their offerings for both ready stock and off-plan units to stimulate demand with local and foreign investors. That’s a positive sign for the industry and Cityscape Global has once again proven that it is the best platform for developers and homebuyers to connect and do business. The projects on display and the added incentives are addressing market needs and meeting consumer demand.”
He added: “With the ability to sell property onsite, visitors were offered a variety of deals that appealed to all price points. We saw the likes of Abu Dhabi’s Aldar, which offered 10% discounts on a range of properties, and Dubai master developer Nakheel, which waived service charges and Dubai Land Department registration fees on residential units across the emirate, vie for investor attention.
“Other developers, such as Sharjah’s Arada and Tilal Properties and Dubai’s Azizi Developments, were also out in full force with deals for prospective investors and end-users. It was encouraging to see activity on developers’ stands and it shows that there are savvy investors who were able to capitalise on lower than usual prices. The real estate market is cyclical and those investing in property now will reap the rewards later on.”
Rajan Israni, chairman of the Sun and Sand Developers Group in Dubai, said market prices offer an ideal entry point for first-time buyers as well as long-term institutional players.
“Every crisis presents challenges as well as opportunities,” Israni said. “Real estate prices in the UAE are very reasonable now and the bottom has been reached. This is the best time to buy. The buyers are all here at Cityscape Global and we are receiving a good response.”
Israni stressed Dubai Land Department and Real Estate Regulatory Agency measures regulating the market. Their roles have been empowered by a law in Dubai delineating guidelines for developers, facilities providers and owners’ associations for the upkeep of jointly owned properties in the emirate.
“The new law applies to all major real estate development projects and jointly owned properties and has brought about more clarity in terms of the rights and duties of developers, facility managers as well as owners,” Israni said.
He said he believes that, since the market is well-regulated and stable, the time is right for the UAE Central Bank to raise limits of mortgage loan-to-value levels in favour of individual buyers.
Earlier in Dubai, the government formed a real estate committee to encourage collaboration between government-related entities and private sector companies and to set the pace of sustainable growth in the realty sector.
Demand and sentiment have peaked in the UAE this quarter because of macro governmental initiatives to boost long-term business confidence. Policies have been put in place offering 100% foreign ownership of some UAE-based businesses (up from the current 49% limit), easing business set-up costs along with the granting of residency visas of up to 10 years to foreign investors and select professionals.
In Abu Dhabi, a new law allows foreigners to own freehold properties in select investment zones. Earlier, they could only own properties on a leasehold basis for a maximum of 99 years.
Four years ago, Sharjah enacted a law enabling foreigners holding a UAE residence visa to buy property in the emirate on long leases in select locations and projects.
Dubai Expo 2020, the mega-event that opens next October, is expected to change the landscape of the emirate.
After it closes in April 2021, more than 80% of its built environment that spans almost 3 million sq. metres will be retained for District 2020. The project will offer homes, offices and business premises within walking distance of each other for innovators, families, pioneers and the creative community.