Economic factors set to boost demand for residential property in Dubai, it is claimed
A more positive economic outlook and improved employment prospects are set to boost demand for residential real estate this year in Dubai, it is claimed.
The emirate’s economy is expected to grow by 4.5% in 2012, up from an estimated increase of 3%, according to Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee.
While the real estate and construction sector is forecast to decline by 2.5% this year, the Department of Economic Development said it was confident overall economic growth would lead to increased demand for real estate and help to ease the emirate’s oversupply issue.
‘I believe by increasing and pushing growth in the other sectors, demand will increase in the real estate sector,’ HE Sami Al Qamzi, director general of the department of economic development, told a press conference.
At present, there are approximately 336,000 residential units in Dubai, with real estate consultants Jones Lang LaSalle forecasting that around 23,000 additional units will enter the market in 2012. Al Qamzi believed increased economic activity and job creation will help to soak up some of this demand.
‘We are expecting more jobs to come and more people to come and we are expecting more demand in the real estate sector. I believe if other sectors start showing positive growth definitely it will have a positive impact on the real estate,’ he explained.
The positive comments come as the latest figures from Dubai’s real estate watchdog reveal that the value of property transactions surged by 20% in 2011, hitting AED143 billion for the year.
Thousands of new investors, many of them from abroad have returned to the market, according to the Real Estate Regulatory Authority (RERA). The majority of investors were from the United Arab Emirates, India and the UK.
‘This is a good sign that investors are coming back. We can expect 2012 to show the same increase or stay at the same level. We are marketing the real estate environment as transparent and secure,’ said Marwan bin Ghalaita, RERA chief executive officer.