Dubai’s Expo 2020 spurs real estate growth as real estate companies report record sales.
The upsurge in Dubai’s real estate market seems to be coming, as the years of policy reforms by the kingdom finally seems to be bringing back investors’ confidence in the sector. Long-term visas for investors and professionals, favorable payment plans and increased flexibility in debt repayment by financial institutions are some of the initiatives that have changed this mood.
“Investors’ confidence has been very high since the announcement that Dubai would host the expo in October,” says Atif Rahman, Partner & Director, Danube Properties. Rahman, this year, has special reason to feel elated because Danube Properties recently delivered a massive AED 300 million luxury residential community project.
“The good news is that we have already delivered this project and the bad news is that we are 100% sold out,” quips Rahman, who believes that delivery of a project is actually the real report card for any builder.
That apart, the last quarter of 2019 had recorded close to 5,000 real estate transactions, the highest number of property sales since 2008, and Dubai’s residential stock that is projected to reach 6,37,000 this year.
Expo 2020 – which the government calls “the largest event ever staged in the Arab world will host 190 countries, and millions of visitors from across the globe. The Expo will stretch for 173 days with several themes ranging from promoting innovation and sustainability in the Arab region.
Rahman thinks that Expo in the past has changed the economy of countries that have hosted such events, “You will see a dramatic growth in local economy and rise in real estate prices. That is the power of Expo,” he says.
Dubai, is betting billions of dollars in its efforts to showcase the Expo as the world’s biggest event ever. The organizers expect 11 million visits by people living in the UAE and 14 million from overseas visitors. A recently published economic impact assessment by consultancy firm EY noted that the Expo is expected to provide an AED 122.6 billion boost to the local economy, besides creating 49,700 full-time jobs a year.
Rahman is confident that the expo will spur further development of Dubai and encourage business.
The investment in Expo and the government spending in the infrastructure around it is one key factor that has been keeping the Dubai economy on track in the recent quarters – a view further endorsed by London-based Capital Economics which predicts that helped by the Expo, Dubai’s economic growth should range between 3.8% and 4.5% over the next few years.
Expo 2020 is expected to create a large number of job opportunities across various sectors including service industries, architecture, infrastructure development and engineering, travels and tourism sectors.
There is no doubt that Dubai’s real estate sector buoyed by the expo is on an upswing now. Developers like Rahman are expecting that post Expo, investors would like to have their base in the country, as he believes the regulatory and infrastructure that it provides is as attractive as any other global city like New York, London or Paris.
Despite the local Emiratis and emergence of Chinese as the leading investors in real estate in the region, real estate developers feel Indians have started looking at Dubai for their real estate investments. Considering the soaring real estate prices back home, the luxury factor has added to Indians interest in Dubai property.
The average price of residential properties in Dubai is in the range of AED 1,000 to 12,000 per sq ft which translates to Rs 20,000 to 24,000.
Rahman says it is the right time to invest in Dubai property market because it is not just about the conventional buying and selling. When you look at the average returns that you are able to clock anywhere else in the world it is still struggling between 5% and 6%. “Sometimes in a very glamorous situation it will be about 7% to 8%. But, in Dubai I can confidently say it is easy to make 10% to 12% all day long,” says Rahman.