Over the past decade, the GCC real estate market has evolved from a predominantly cash-funded, off-plan driven investment boom to a consolidated market, servicing greater numbers of mortgage-financed property owners.
The market is maturing, and the regulatory environment is developing towards global standards, which has had a positive impact on the real estate services industry, particularly in respect of property management and consultancy services.
Furthermore, legislation in the UAE, such as Abu Dhabi Law No. 3 of 2015 and Dubai Law No. 8 of 2008, set out investor friendly regulations such as the requirement for developers to maintain escrow accounts for off-plan developments. This encourages institutions to fund new developments and is providing protection to mortgagees of off-plan purchases.
Real GDP growth in the UAE is expected to outperform the world economy each year between 2018 and 2020. Furthermore, Dubai's population is estimated to increase from 2.6 million in mid-2017 to 2.9 million in 2021.
The Directors believe that the trajectory of Dubai's real estate market is expected to stabilize further in 2019. Recent analyses by other property consultancies and management firms, including JLL, Knight Frank, Cavendish Maxwell and Asteco, have been similarly upbeat about the medium-term potential for market recovery in Dubai, albeit cautiously so. Forecasts from local real estate analysts and international players alike foresee an improving sector outlook by the end of 2019 at the latest.
The current environment therefore provides a number of opportunities to enter the UAE real estate market following an extended cooling off period. Furthermore, the backdrop of improving oil prices and anticipated increase in population further strengthens investment rationale.