Dubai — The Indian and Pakistanis are among the top five foreign investors who purchased properties in Dubai last year, latest report shows.
Investors from India topped the list of foreign investors in terms of nationality with 5,426 transactions, followed by Saudi Arabia (2,198), China (2,096), and the UK (2,088), Pakistan, Egypt, Jordan, the USA, and Canada. The UAE investors also led by 5,172 property transactions last year.
According to Dubai Land Department (DLD) annual report titled ‘Real estate sector performance 2020,’ on the side-lines of the International Property Show and Invest in Dubai Real Estate, the value of real estate transactions reached approximately Dh226 billion last year compared to Dh221 billion in 2018, reflecting a growth rate of 2.1%.
“This improvement in the value of real estate transactions is due to the remarkable growth in the value of both sales and mortgages, where the value of sales reached Dh81 billion in 2019 compared to Dh77 billion in 2018, with a growth rate of approximately 5%, and the value of real estate mortgages reached Dh125 billion in 2019 compared to Dh120 billion in 2018, with a growth rate of approximately 4%,” the report said.
In addition, the number of real estate investments in 2019 exceeded 47,000 investments, with a growth rate of 18% compared to 2018, which achieved 40,000 real estate investments, and the number of real estate investors also witnessed a remarkable growth during 2019 compared to previous years.
“The number of real estate investors in 2019 exceeded 34,000 real estate investors, compared to 2018 with 29,846 investors, with a growth rate of 14%,” the report said.
Sultan Butti bin Mejren, director-general of DLD, described the report as a comprehensive monitoring tool that strengthens decisions and enriches analyses, affirming DLD’s approach based on the importance of communicating with all customers and partners from different parties.
“We regularly develop and introduce several tools, highlighting the highest levels of transparency in disclosing the results of the performance of Dubai’s real estate market and its achievements, which represent annual key outputs. With the report, customers can learn about the latest developments in the real estate market and benefit from the information and data included to make informed investment decisions related to buying, selling, investing and entering into partnerships,” Bin Mejren.
“Despite the consequences of the outbreak of Covid-19 and its repercussions on our real estate sector and all other sectors, we have been keen on issuing the report on time to emphasise the strategy of regular communication with all parties interested in the sector’s performance, helping them form a comprehensive picture and identify our efforts and initiatives to address any gaps that may appear to ensure that the market continues its usual activity,” he added.
The sector’s attractiveness
Dubai Marina ranked first in terms of real estate investment quantity in 2019 with 3,920 investments, followed by Business Bay with 3,508 investments, Al Khairan First with 3,142 investments, Hadaeq Sheikh Mohammed Bin Rashid with 2,833 investments, and Burj Khalifa with 2,721 investments.
In terms of real estate projects, a total of 1,894 projects were registered with DLD in freehold areas, 814 of which were completed and 314 under construction. In 2019, 70 real estate projects were registered with DLD, while 14 were registered in H1 2020. Of the projects registered in 2019, 69% were buildings, 24% were villa complexes, and 7% were villas.
As for the completed projects according to the year of project completion, 78 projects registered with DLD were completed in 2019 in freehold areas compared to 63 projects in 2018.
In addition, 314 projects registered with DLD are still under construction up until H1 2020. According to the date of project registration, 53 projects were registered in 2019, compared to 61 in 2018, 75 in 2017, and 45 in 2016.
As for Ejari contracts, 469,310 effective Ejari contracts were registered in 2019 according to the date of contract registration, compared to 448,564 Ejari contracts in 2018, with a growth of 5%.
“Through this report, we target all customers and partners, including developers, investors, sellers and buyers, media institutions, and local and international research agencies, through its four chapters that focus on monitoring the performance of our real estate sector in 2020,” Majida Ali Rashid, CEO of the Real Estate Promotion and Investment Management sector at DLD, said.
“Our teams have used an ample amount of data for the various types of recorded behaviours, paving the way for an analysis of the operational performance indicators of the sector and preparing the report based on a comprehensive editorial approach,” she said.
To review the economic indicators of the emirate, she said it was necessary to discuss an important issue affecting its performance, namely ‘The impact of Covid-19 on the performance of the real estate sector,’ which discussed potential and expected effects of the real estate sector’s performance in light of the restrictions imposed by the spread of Covid-19.”
Real estate is an important tributary
Dubai’s real estate sector represents one of the main economic sectors in economic growth, and it actively contributes to the growth of its economy. Over the past years, the emirate has achieved record rates of economic growth driven by the economic initiatives and packages that the Dubai Government is undertaking to raise economic growth and stimulate various economic sectors. The value of Dubai’s GDP reached Dh407 billion in 2019 compared to Dh389 billion in 2018, with a growth rate of 2.2%.
But the emergence of Covid-19 in December 2019, and its subsequent outbreak around the world, led to a decline in global economic growth rates, prompting all international institutions to reduce their global growth forecasts for 2020. To avoid the consequences of the pandemic, Dubai provided a package of measures and economic incentives to ensure business continuity and help the various economic sectors overcome the pandemic, most importantly the launch of an economic stimulus package to support companies and the business sector in Dubai to boost financial liquidity, among others.
The contribution of the real estate sector to Dubai’s GDP reached 7.2% in 2019, and the sector achieved an added value of more than Dh29.4 billion, with a growth rate of 3.3% compared to 2018. Real estate transactions achieved remarkable growth in 2019 in terms of the number and value of real estate transactions, and this improvement continued during the first months of 2020. The growth rate achieved in the number of real estate transactions reached 8% in 2019 with over 57,000 real estate transactions, compared to over 52,000 real estate transactions in 2018.