After the COVID-19 setback, Dubai’s economic activities have returned to normal and so has the property market. The latter is expected to gain momentum in a few months from now, especially with the Expo 2020 approaching. For the uninitiated, this mega event was moved to 2021 from its decided date owing to the global pandemic.
With the resumption of the Dubai real estate market, dubai developers are working round the clock to ensure the announced projects and developments are completed before the Expo 2020 takes place.
Almost every industry suffered the impact of the novel coronavirus as it halted their operations. However, Dubai’s property market showed its resilience. It completed almost 30% of residential units that were announced in H1, 2020.
As per ValuStrat, a real estate consultancy firm in the Middle East, the first half of 2020 witnessed the completion of nearly 14,000 residential units. According to their latest report, approximately 10,803 villas and 34,917 apartments are currently under construction. These projects are expected to be completed before the Expo 2021.
ValuStrat’s head of real estate research, Mr Haider Tuaima believes that the chances of delays in the completion of a few projects can’t be ignored. An estimated number of 45,720 residential units were planned to be completed in this region during 2020. However, keeping into consideration the records of the past few years, coupled with delays caused by the global pandemic, the planned figure may not be accomplished.
Real estate experts are of the view that almost 30% to 40% of the announced projects in Dubai for 2021 will be ready at the scheduled time. As per Mr Tuaima, it is planned that Dubai will become home to 80,008 (an approximate figure) residential units in 2021. Over 50% of residential units of the total announcements will be completed in Dubailand, Akoya Oxygen, Arjan, Mudon, Liwan, MBR City, JVC, Town Square and a few others areas.
Statistics clearly show that the real estate sector contributes a great deal in the UAE’s economy. Particularly, Dubai’s economy is vastly dependent on the property market. Other than Dubai, Abu Dhabi and other emirates have also shown progress in terms of increasing the real estate inventory in previous years. The latest data shows that it makes up for 5.4% of the UAE’s GDP at constant prices. Similarly, its contribution to Dubai’s GDP stands at 7.4%. For Abu Dhab’s GDP, the contribution of the real estate sector is 3.6%.
The delay of Expo 2020 is said to have a positive impact on the real estate sector as the property developers have gotten another year to complete their projects. As per CEO of Samana Developers, Mr Imran Farooq, 115 units of Samana Greens will be ready and delivered in the fourth quarter of 2021. In addition to this, Samana Hills will also have 115 units delivered in September 2021. Currently, 50% of the structural work worth AED 100M has been completed. Therefore, it can be ascertained that this development will be completed before the scheduled time.
Mr Imran also believes that the projects helmed by Samana Developers have remained unaffected by the COVID-19 and restrictions that were imposed as a result of this pandemic. The firm managed to continue construction work at Samana Hills and Samana Greens. The former is 50% complete with respect to structural work while the latter stands at 93% completion status. Strict safety measures were followed during the construction phase.
The period between 2012 and 2014 witnessed a major imbalance between demand and supply levels. Dubai alone had almost 90,000 additional units. However, as per Mr Tuaima, during the 2018-21 period, it is expected that the number of additional units will be below 70,000.
Mr Farooq echoes the thoughts of Mr Tuaima that imbalance between supply and demand exists. However, he is also of the view that the Expo will play a major role in fixing this imbalance. With as many as 192 countries participating in the Expo, Dubai will have an influx of travellers and visitors. Therefore, the demand for residential properties for sale in Dubai is expected to experience a surge.
Not only real estate, but the Expo 2020 will also boost tourism, hospitality, and other related industries in Dubai.