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The GCC real estate market is likely to be resilient and register robust growth at a slow pace despite the slump in oil prices by the end of 2016 and beyond. Mega events such as Dubai Expo 2020 and Qatar FIFA World Cup 2022 are likely to provide the boost in region’s tourism and real estate industry in the future.view

The Public Private Partnership (PPP) framework is expected to present opportunities in 2016 and 2017 for the real estate sector. The hospitality, residential and office lease markets remain buoyant in the GCC whereas the retail segment is expected to continue its aggressive expansion in the coming years. Within the residential sector, there is likely to be a continued shift of activity to the affordable sector. In addition, the demand for healthcare real estate is rising on the back of increased medical tourism in the region.

Opportunities

According to reports, the market is poised to grow at a CAGR of 6.4% from 2015-2019 with rising population being the main growth driver.

Despite headwinds, opportunities exist in UAEs real estate market in 2016 as it looks set to witness the initiation of a number of projects leading up to Dubai Expo 2020 and Abu Dhabi Vision 2030, and they are likely to help rejuvenate both real estate and business activity. The Dubai government’s recent revival of abandoned real estate projects worth US$ 3.26 billion is also likely to open up numerous investment opportunities and evince interest in the market again.

The private sector will dominate the real estate sector in Dubai accounting for over 70% of total supply of the emirate’s housing units over the next few years. Office supply in Dubai will grow by 7% in 2016 (Core estimates). Abu Dhabi is expected to receive supply of 746,000 square metres of gross leasable area (GLA) office space between 2015 and 2017 (Al Masah Capital estimates).

The tourism sector has significantly expanded and the country is already among the top five countries in the world for new hotel openings, in anticipation of over 25 million tourists expected to visit Dubai Expo 2020. It is estimated that there are 31 new hotels in the pipeline (including independent hotels), due for completion in 2016, which will increase Dubai’s hotel room inventory by approximately 14% (9,300 keys) to a total of 76,500

Features and Advantages

  • • Though the headlines shout out seemingly alarming statistics such as the 11 – 12% correction or threats of oversupply; the on-ground reality is that the Dubai real estate market has been quite stable and been experiencing a steady (and perhaps much needed) correction.
  • • Rental yields are still higher than what you can find in most major real estate markets in the world.
  • • Prime real estate in Dubai is still much cheaper than what you find in most major real estate markets in the world.
  • • Regulated real estate market; investors can feel more confident when purchasing in Dubai due to Government reforms and initiatives to increase transparency and investor protection.
  • • Dubai Government budget is increasing by 12% this year and is operating on a surplus. Compare this with other economies in the region and Dubai is in a more healthy position. Only 6% of Dubai Government revenue is oil based.
  • • The busiest airport in the world – 77 million passengers in 2015.
  • • Government proactively planning to move UAE beyond oil.
  • • Major tourist destinations and city revitalization taking place. This includes Dubai Parks & Resorts, Blue Waters Island, Dubai Canal, Dubai Safari Park, an Astronomy Center, IMG World of Adventures, The Opera House, Nikki Beach and more.
  • • Expo 2020 construction and infrastructure to fuel further Government spending and related private sector investments.
  • • There is general consensus that the UAE has the most progressive and proactive leadership in the Middle East.
  • • There is no property tax in Dubai. Which means, once you have bought the property, paid the registration fee to Dubai Land Department, there is no other government tax to be paid against your property at all.
  • • Low Acquisition Cost.

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