Dubai's property market 'continues to attract investors'
The strength and robustness of Dubai's real estate market has led to a consistent level of interest from investors throughout 2014, with one of the most promising and popular sectors being hotel property.
This year has seen the emirate's real estate market move from strength to strength, achieving significant growth and development despite recent negative global trends. In fact, Dubai's property market has been able to meet and exceed investor expectations consistently during the last 12 months.
Here are just a few reasons why 2015 could be the perfect time for you to invest in the emirate's real estate market.
Over the last decade, the UAE has become an economic powerhouse, with its gross domestic product (GDP) growing from AED314.81 billion to AED1.54 trillion (£55 billion to £240 million), according to a report from HotelsandRest.
In just ten years, the country has transitioned from having an oil-based economy to a productivity-based one with enormous diversity in various sectors, including hospitality and tourism.
The UAE's economy is set to grow even further, according to forecasts from the International Monetary Fund, which predicts that its GDP will rise to AED1.74 trillion by 2018. Furthermore, in terms of national per capita gross income, HotelsandRest forecasts that the UAE will become one of the top ten countries by 2020.
According to data from Dubai's Department of Economic Department (DED), the emirate's economy will remain robust in the face of challenges.
Its chief economist, Dr Mohamad Lahouel, said 'Dubai’s economic growth has been steady in recent years despite high volatility in the international environment from lingering recession in the EU and in Japan, weakening of growth in main emerging markets, sharp drop in oil prices.
'Still, Dubai’s adaptive capacity and its strong role as a trade hub promise to deliver healthy growth in 2015.'
Statistics from the DED reveal that the emirate's GDP grew by 4.6 per cent in 2013, four per cent in 2014 and is expected to achieve an increase of 4.5 per cent next year. Trade, real estate services and manufacturing are thought to be the biggest drivers of growth for 2015, contributing 58 per cent of the overall increase.
Dr Lahouel added: 'Dubai’s economy is well diversified, stronger and more efficient than pre-crisis years. We are confident that the economy can withstand international markets volatility.'
Investor and occupier demand for high-quality property located in areas with developed infrastructure has continued to be strong throughout 2014, with this trend expected to extend into next year, according to a new report from commercial real estate company CBRE.
Dubai's commercial property market enjoyed a strong year, with lease rates surging across primary and secondary locations in 2014, despite an influx of new stock. CBRE attributes this to solid economic growth and improved business confidence, which have worked together to allow small to medium-sized enterprises to enter the market.
According to the firm, the retail property sector has remained buoyant during the year, with major retail centres achieving occupancy rates of over 95 per cent. This has been credited to a robust economy, an increase in tourists visiting the emirate and changing consumer behaviour.
Mat Green, head of research and consultancy for the UAE at CBRE Middle East, commented: 'Rising tourist numbers along with planned festive activities should see another strong year for the retail sector. With strong fundamentals, the sector is expected to see further growth with addition of new retail brands waiting to enter the market.'
Dubai's hotel property sector is set for another great year in 2015 as more tourists than ever are expected to head over for leisure and business reasons. In 2014, some 5.8 million people visited the emirate in the first half - the highest number ever recorded for a six-month period.
If the emirate can muster up a similar performance, or indeed exceed this year's achievement, the hotel industry is set to make significant gains during 2015.
PricewaterhouseCoopers' 'Gateway for Growth' report predicts that the hotel sector in Dubai is set to grow even further in 2015, with the emirate benefiting from increasing numbers of both tourist and business travellers who are seeking out stable destinations. The firm believes that owners and operators of Dubai's hotels will be able to achieve profitable growth as they can capitalise on an improved environment and new opportunities.
Posted by Neil King