Dubai's real estate sector growth up 2.5%

GMT 09:28 2015 Wednesday ,12 August

Arab Today, arab today Dubai's real estate sector growth up 2.5%

Dubai's real estate
Dubai - WAM

Ismail Al Hammadi, Founder and CEO of Al Ruwad Real Estate Consultants drew attention that the Real Estate sector in Dubai showed notable success much against the number of international studies which predicted that the real estate sector will see a downfall of 20% in the beginning of the year. But instead, it achieved an average annual rise of 2.5% in the first half of the year in 2015.

Hammadi stressed that the volume of real estate sales exceeded by Dh 129 billion during the first six months of this year (According to the Land and Property Department in Dubai), compared to 57.6 billion dirhams during the same period last year, and that about 20 thousand investors belonging to 142 different nationalities pumped nearly 53 billion dirhams from January until June (6 months).

"What was happening on ground in Dubai is frankly quite different and very strange. Since we saw that in spite of the rate of residential property prices decrease at first, it then rose to 3% in the second quarter of the year. This is more than the annual growth rate of 2014 which was 2.5%." Al Hammadi said.

He added that this was thanks to the overlapping of several factors which contributed to keeping the liveliness and activeness which is one of the most important features of Dubai's real estate sector. He also pointed out the fact that the market has witnessed a wave of sales resulting in the developers realising that the limited-income families are an important part in reviving the market and the reason to add to the continuing growth equation.

"Several huge projects, that have seen the light of day, enabled for more flexible options in terms of prices yet preserving the reputation of Dubai in terms of elegance and status. Some of such projects have fully been sold after less than a day of their launch, with easy settlement options of 1% interest over seven years!" Al Hammadi continued.

Al Hammadi said that these projects have been credited due to the recorded high amount of sales in Dubai over the past few months, where he pointed out that the month of June alone had witnessed sales worth 1.2 billion dirhams.

Al Hammadi noted that the presence of world's largest giant companies in Dubai is another factor that supports the real estate sector across the medium and long-term strategic plans, citing Emaar Properties as an example.

Being one of world largest real estate development companies in terms of value with its assets touching the mark of Dh 159 billion and 216 million square meters. At the same time, pointing out to the quarterly results announced by the company just days before, which showed that they accomplished a net profit amounting to Dh 2.2 billion during the past six months, an increase of 12% from last year.

Al Hammadi pointed out that Emaar Properties is not an exception to great figures, after confirming the results just a few hours ago, by the DAMAC Properties, where it shows that its mid-term profit jumped to Dh 2.7 billion, recording its shares as the highest level price since listing, thanks to dividends and profits.

Al Hammadi linked the positive breakthroughs of Dubai Financial Market to the entire real estate sector shares, and that the general index of the market received significant support from these shares.

Al Hammadi expected that infrastructure projects for the Expo 2020 is going to create a state of sustainable stability for real estate prices in the Emirate of Dubai, particularly in light of the launch of "Meydan One ", a crucial and enormous project, which was unveiled just a few days ago. Housing, commercial and tourism projects that is to be built on 3.6 million square meters. The Project includes the "Dubai One" tower, the tallest residential tower in the world which will be up to 711 meters high, in addition to a similar announcement of the tallest commercial tower in the world, "Burj 2020" Tower in the Jumeirah Lakes Towers area.

In this context, Al Hammadi cited that with official figures that have been announced earlier, the Expo requires investments in infrastructure worth US 8.8$ billion (equivalent to 32.4 billion dirhams), and the returns will amount to US 23$ billion (according to the Bank of America Merrill Lynch).

Al Hammadi stressed that the government's step in the liberalisation of oil prices carries a positive impact on real estate sector, especially now that the diesel prices have been reduced, which promises a steady growth rate in the near and long term future.

Sustainable growth He concluded that he has a positive outlook and will focus on maintaining and exploring the potential of the Dubai real estate with an emphasis on local, regional and bringing it up to par on a global level too. He said that, "It's no secret that the Dubai Market in particular or the UAE in general has great potential in terms of its value in real estate assets. For example, it's about 122% higher than its Singaporean counterpart."

Al Hammadi pointed out that the real estate sector is a key contributor to the gross domestic product of the Emirate, which is why Sheikh Mohammed bin Rashid adopted the largest budget in its history for the current year 2015. This is a huge gesture and shows the potential and strength of the real estate sector and to what extent it contributes to the budget which recorded a deficit of (0) Dh.

Hammadi expressed his optimism about the future of the real sector as Dubai turned into the Capital of Global events with its 200 Global conferences and thus proving the need to improve the infrastructure to keep pace with the growing demand.

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