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The year 2014 could be considered one of the most important periods in Dubai’s real estate history. It demonstrated to the world that the real estate industry in the emirate has achieved a level of maturity that enabled it to successfully manage the significant challenges associated with being the hottest real estate market in the world without succumbing to what would have been an inevitable and resounding crash.
But crash it didn’t. The market in 2014 saw a slowdown which was managed and welcomed by all those who wished to see a market which enjoys healthy and sustainable growth rates.
Given the events of 2014 and the resultant state of play, what is likely to shape the industry this year? For a start, the development of the policy, regulatory and legal framework will continue. To achieve this, 2015 will see a continuation of focused oversight, policy development, credit controls, implementation of legislation to protect investors and tenants, and an increasing focus on the pro-fessional development and ethical standards of industry participants.
This year will also see increasing levels of investments by the government, corporations and entrepre-neurs as the continued focus of economic policy and resources on building the economic pillars of tourism, trade and finance gathers pace. Much of the investment in infrastructure will be in preparation for the Expo 2020 and all its effects.
In a sense, 2015 can be seen as a launching pad for the industry as it plays its part in a period of strong economic growth. Having established its resilience and maturity, the event which will most shape the industry going forward is the Expo.
This year will see a more intense focus on the requirements and opportunities that the event will bring the industry and economy as a whole, from new transport systems to waterfront developments, from multi-billion dollar theme parks to affordable housing developments. The event will be the biggest ever to be held in the emirate and one that will play an important role in helping shape world opinion of Brand Dubai.
Economically, the potential benefits are enormous. For real estate, hosting the Expo will provide the impetus for the industry to enjoy continued growth and the predictable surge in demand for accommodation of all types, from labor camps to apartments to executive villas.
This year, investor demand will drive much of the value appreciation on the back of renewed confi-dence in an economy which has already shown robust growth in 2014. However, initial end-user demand is likely to increase for accommodation, both villas and apartments, in close proximity and easy access to the site itself. The demand for this type of property will continue to increase in the run-up to the event launch and duration.
This year will also see office and commercial units benefit from a rise in demand as operations are commenced for those companies involved in the initial construction or preparatory phases. It is likely that new developments will commence in areas in close proximity to the Expo site, while the area surrounding Dubai World Central is also likely to be in focus for developers as logistics, storage and transport service providers look to set up shop.
The year 2015 will be remembered as the first year of a new era characterized by strong economic growth, major investments in economic initiatives and infrastructural development, a robust and expanding yet sustainable real estate industry and a rapid population growth rate driven by economic opportunity.
In this respect, the achievements of 2015 will have a huge bearing on the degree of success enjoyed by the emirate over the next decade.
Source: Mohanad Alwadiya, Harbor Real Estate