A report by Dubai Economy revealed that Emirati investors topped the list of investors in the real estate market in Dubai during the past year, with investments amounting to about 10 billion dirhams, and the report attributed this to the continuous increase in the population of citizens and the increase in the supply of real estate in the market, especially residential real estate.
The report expected that the Emiratis will maintain their share of the total real estate investments, pointing out that the Indian investors are ranked second among the largest investors in the real estate market in Dubai with investments amounting to 9 billion dirhams, then the British investors in the third rank with investments exceeding 4 billion dirhams, followed by the Saudis with investments 3 billion dirhams, then Pakistanis, Chinese, Jordanians, Egyptians and Canadians.
The annual report of the Dubai Economy indicated that the real estate market in the UAE in general, and Dubai in particular, has great potential to attract more local and foreign indirect investments through real estate investment funds, and these investment tools are closed funds that provide liquid and flexible investments in real estate with tax benefits and without complications and costs Transactions involved in direct ownership of the property. Noting that there are currently two real estate investment funds listed in the Emirates, namely the Emirates Real Estate Investment Fund and the Emirates NBD Fund for Real Estate Investment, both in Dubai and listed on the Nasdaq Dubai Stock Exchange, where they invest in real estate assets compatible with Islamic law such as office buildings, warehouses, retail centers, schools and parking the cars. The Dubai Financial Market has issued regulations for listing and trading of real estate investment funds in anticipation of further growth in these real estate investment tools in the emirate.
The report said that real estate activities represent an important part of the services sector in the Dubai economy, stressing that it achieved an added value of 28.7 billion dirhams (at constant prices) during the past year, thus becoming the fifth most important economic sector in terms of value, as the number of workers in the sector reached about 33 thousand A worker is equivalent to about 1.6% of the total workforce in Dubai, but the productivity of this sector has a high added value of about 649,000 dirhams per worker on average, which is the second highest productivity in the economy.
The report added that the value added of real estate activities in Dubai has grown strongly during the past year, rising by 7%, which is more than three and a half times the rate of real GDP growth, and it is expected that the real estate sector growth rate will decrease to nearly half the rate of last year, to record 2.2 % During the end of this year, and 3.6% during the year 2020.
The report said that real estate investments formed an estimated 23% of the total capital spending during the past year, pointing out that the real estate market in the field of offices witnessed an increase in costs with the merger of some companies, and the report expected that the owners offer more attractive conditions such as competitive prices and contribute to clothing and months Free and active management of assets and renegotiation of early renewal of the lease.
According to the report, the number of residents in Dubai is expected to increase at an annual rate of 1.46% between 2018 and 2022, indicating that the expected future demand for residential real estate is driving growth in the supply of units that enter the market annually, warning that the increase in the supply of apartments Demand will pose a risk in the coming years in a way that there is a surplus in the market that leads to more pressure on selling prices and rents.
He explained that the slowdown in demand for high-end and luxurious residential units is partly due to the current stock size of these units and difficult economic conditions, and therefore the number of private villas under construction during the past year decreased by 3.3% to 6022 units while the construction of investment villas declined by more than half from 18,000 And 753 villas to 7010 villas.