The UAE’s series of game-changing regulatory amendments will significantly fuel the recovery and growth of the country’s property market, according to Lootah Real Estate Development (LRED).
In its new Industry Insights Report, LRED highlighted the top seven drivers that it believes will propel the real estate sector’s recovery from the effects of the pandemic during 2021.
Lootah Holding’s group CEO Arash Dara said: “There are clear indicators that the UAE’s economy will see a V-shaped recovery from the impact of Covid-19, gauging from the notable pick up in trade and tourism sectors and the renewed positive sentiments brought about by historic immigration rules and peace deals spearheaded by the country.”
LRED COO Russell Owen added: “Dubai continues to be one of the most sought-after destinations for tourists and investors. Investors and end-users stand to benefit from the property price correction and we are already seeing a movement from renters to homeowners due to attractive property prices, lower mortgage rates, and higher loan to value ratio.”
1. Emirati nationality and passport for certain expats
According to Dara, this new measure will attract and retain the talents that will continue to drive the long-term economic and development goals of the UAE. They will be encouraged to look for permanent homes and long-term residences, which will drive the demand for UAE’s property market.
“This historic decision by the leaders to grant certain expats Emirati nationalities and passports will play a vital role in the country’s long-term economic diversification objectives, cementing the leaders’ commitment to have a growth partnership with the right workforce. It will be a game-changer for the UAE’s real estate sector too, as it will increase the demand from both the end-users and the investors community,” he said.
2. Wide-ranging visa rules including the UAE Golden visa and student visas
Dara said: “These landmark visa rules provide a highly positive impact on the UAE’s real estate sector by creating a less transient expat population. With more people expected to stay in the country for a longer period of time, the more sustainable demand for properties will be.”
3. Normalising UAE’s relations with Qatar and Israel
Owen said that the strategic location of Dubai in the heart of the map and its close proximity in key cities in the world makes it an ideal place for Israeli and Qatari investors.
“The transformative economic cooperation between these nations has made many Israel and Qatari investors realise the great potentials of the UAE, and of Dubai in particular, in terms of diversifying their real estate holdings,” Owen said.
4. National vaccination rollout
“UAE’s standing as a leading player in Covid-19 vaccination reaffirms that the country’s wise leadership places health and safety as a top priority. The leading global position of the UAE in key Covid-19 indices will strengthen investor confidence and draw more people to invest in real estate,” Dara said.
The UAE offers four vaccines – Sinopharm, Pfizer-BioNTech, Sputnik V, and AstraZeneca – free of charge and on optional basis to UAE nationals and residents.
5. A boost in tourism with Expo 2020
Owen said: “Expo 2020 Dubai, along with lots of opportunities it offers for the travel and tourism sector, is a vital contributor to the potential growth of Dubai’s real estate market this year. The construction of the mega projects within the Expo 2020 site ushers in multiple opportunities and prospects for residents, who are looking to invest and rent properties.”
He also highlighted Dubai Metro’s Route 2020, linking the city with the World Expo site, saying it is also expected to benefit developers, residents, and businesses alike.
“Studies show that properties near to a Metro station will lead to higher property values and rental rates, making them more attractive and resilient compared to those in other areas. Once DIP Station opens, our residents at The Edge, Ewan Residences, and soon-to-rise Ewan Avenue will benefit tremendously from this. Such transport progress will further propel the real estate market of Dubai towards greater heights – especially in the post-crisis era,” he said.
6. Renters opting to become owners
As early as August, LRED reported an increasing number of Dubai residents shifting from being renters to becoming first-time homeowners.
According to Owen, a host of factors has increased interest in owning a home during this time. It includes attractive property prices, lower mortgage rates, as well as higher loan to value ratio where expats can borrow up to 80 percent of their property purchase price and up to 85 percent for UAE nationals.
“This growing market transaction is driven by professionals and families seeking affordable homes that are conducive both for residential and working lifestyle while building equity.”
7. Full company ownership
The changes to Federal law No. 2 of 2015 of the Commercial Companies Law – allowing full foreign ownership of commercial companies without the need for an Emirati shareholder or agent – will play a vital role in attracting more investments and liberalising business activities in the UAE, said Dara.
Dara added: “This significant measure is set to not only help the economy gain its sterling position as a leading global hub for business but also to accelerate economic growth and productivity in the UAE even further. With the nation’s stronger economy, investor confidence will be shored up further, and the property market will follow suit.”
Author: Arabian Business