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September has been abuzz with news from Cityscape Global in Dubai, now considered the most prominent real estate exhibition in the world. The show hosted more than 300 exhibitors in an expanded space, representing 30 per cent growth since last year's event. While announcements from exhibitors such as Emaar, Dubai Properties, Dubai World Central, Meydan, Meraas and Nakheel made headlines, there were first time exhibitors such as DMCC, Majid Al Futtaim, and Al Barari who also showcased their projects. A month later, this is perhaps an ideal time to assess exactly what the temperature of the market is post the annual event.
So far, we are all aware of the well-publicised slump this year, with a slowdown in the number of transactions. However, there have been some positive signs recently that suggest the fourth quarter could be more active, which then bodes well for 2016. For example, as we were leading in to the summer our numbers were picking up and I think most agencies experienced a pretty good June in terms of sales transactions numbers — and that was after a really tough final two quarters of last year, and pretty tough first two quarters of 2015. Of course July and August were typically quiet, but now everyone hopes the positive momentum will start again and we will begin to see more transactions in October.
Political and economic factors always drive confidence and with oil prices falling people have rightly wondered how this will affect key markets in the GCC moving forward. However, even though property purchasing prices may have dropped a little, with a few distressed sales being seen, there has been no suggestion of a crash. Experts agree the drop in oil prices shouldn't overly worry Dubai as the emirate has diversified its income streams so that it is no longer dependent on this area. In fact, when I am asked what the mood of the property industry is right now, I can say that I sense a lot of renewed positivity. One interesting reason for this has been the recent deal between global powers and Iran. If Iran opens up as planned, it seems logical that Dubai will be a key beneficiary since it is already one of Iran's biggest trading partners.
Good times ahead
My advice to potential buyers would be to look at existing properties in Dubai despite many new developments that have been showcased. Although it has been a sluggish year, rents in fact have not really come down and units still offer a return on investment for leasers.
We cannot get away from some unsettling facts such as the war in Yemen, and the rise in extremism in the region. Thankfully, the UAE still enjoys a safe haven status, due to a myriad of factors that include the stability and progressive nature of the government, as well as the diverse population mix. This is all reflected in the high level of global interest and investment still heading this way.
With the potential outcomes of the Iran deal, the rebirth of the construction sector here, not forgetting the approach of Dubai Expo 2020, there are definitely some very interesting times ahead.
Source: Manuela Reis, Special to Property Weekly