Expo 2020 spurred growth in Dubai's real estate market, with developers reporting record sales.
Investor Confidence Returns
An upturn in Dubai's real estate market appears to be under way, as years of policy reform bring investor confidence back to the sector. Long-term visas for investors and professionals, favourable payment plans and more flexible debt repayment from financial institutions are among the initiatives that have changed the mood.
"Investors' confidence has been very high since the announcement that Dubai would host the expo in October," says Atif Rahman, Partner and Director, Danube Properties. This year Rahman has special reason to be pleased: Danube Properties recently delivered an AED 300 million luxury residential community.
"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 delivering a project is the real report card for any developer.
The last quarter of 2019 recorded close to 5,000 real estate transactions, the highest number of property sales since 2008, and Dubai's residential stock is projected to reach 637,000 units this year.
The Scale of Expo 2020
The government calls Expo 2020 "the largest event ever staged in the Arab world". It will host 190 countries and millions of visitors from around the globe over 173 days, with themes including innovation and sustainability in the Arab region.
Rahman believes Expos have changed the economies of the countries that hosted them. "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 investing billions of dollars to showcase the Expo as the world's biggest event. Organisers expect 11 million visits from UAE residents and 14 million from overseas visitors, and an economic impact assessment by consultancy EY found that the Expo is expected to add AED 122.6 billion to the local economy and create 49,700 full-time jobs a year. Rahman is confident it will drive further development and encourage business.
A Boost for the Wider Economy
Investment in the Expo and government spending on the surrounding infrastructure have helped keep Dubai's economy on track in recent quarters, a view endorsed by London-based Capital Economics, which predicts that, helped by the Expo, Dubai's growth should range between 3.8% and 4.5% over the next few years. The Expo is also expected to create a large number of jobs across services, architecture, infrastructure and engineering, travel and tourism.
Buoyed by the Expo, Dubai's real estate sector is clearly on the upswing. Developers such as Rahman expect that after the Expo, investors will want a base in the country, since its regulation and infrastructure are as attractive as those of New York, London or Paris.
Growing Interest From Indian Investors
While Emiratis and Chinese investors have emerged as leading buyers in the region, developers say Indians have also started looking at Dubai for property investment. With prices soaring at home, the luxury on offer has added to their interest. The average price of residential property in Dubai ranges from AED 1,000 to 12,000 per sq ft, which the source gives as Rs 20,000 to 24,000.
Rahman says now is the right time to invest in Dubai because it is about more than conventional buying and selling. Average returns elsewhere in the world struggle to get beyond 5–6%. "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.
