Changing sentiment in real estate

▶ Dubai’s market is benefiting from government spending

Cityscape Global, one of the biggest property events in the region, will open its doors to public next week. There is a sense of excitement about this year’s showcase as developers with projects in the UAE, for the first time in years, will be able to directly sell properties to public at the event.

The market is already buzzing with real estate companies promoting their projects, offering special promotions and flexible payment plans to end-users and guaranteed rental yields to investors.

Deals are available for every budget and people will get the chance to compare investment options and make an informed decision on the spot.

All that excitement is a result of rising confidence in the Dubai’s real estate sector. The property market, which had recovered well from the 2008 property market crash, has faced headwinds on the back of slower economic growth and persistently low oil prices.

The values and rental yields are still under pressure though and some analysts are anticipating slight weakness in the short term. But the market has come a long way from where it was two years ago when a slump in crude prices rattled investor confidence.

The resilience of Dubai’s economy – growing at 2.9 per cent in 2016 despite global economic weakness and a strong dollar that year – is certainly helping in bringing investors back from the sidelines. Preparations for Expo 2020 are in full swing and the government investment program associated with the event is expected to fuel the demand for properties further. The emirate’s 2021 vision for economic diversification is on track, which will also help lift economic growth and further boost investor confidence.

The IMF expects Dubai’s economy to expand by 2.7 per cent this year and 3.6 per cent next year on the back of investment and Expo 2020 related spending. The emirate plans to spend Dh47.3 billion in 2017, a budget that will be driven by a 27 per cent jump in infrastructure spending as it prepares for the mega event.

Dubai’s economic diversification efforts and its big spending plans are also reflected in the improved sentiment of GCC-based investors. who regard the emirate as the top global city when it comes to real estate investments. A new study by YouGov and Cityscape Global found 69 per cent of respondents chose Dubai as the “go to” city for property investment, with two thirds expecting Expo 2020 to increase property buyer’s interest in the UAE.

The IMF expects Dubai’s economy to expand by 2.7 per cent this year and 3.6 per cent next year