Reaching for the sky
The UAE is set to witness a strong return on investments in the range of nine to 12 percent per annum, which will serve as a major attraction for investors. With the market picking up at the same time, the realty sector is on a very strong growth trajectory, according to research carried out by Tasweek Real Estate Development and Marketing.
The Tasweek study revealed that the UAE's real estate sector contribution to the country's GDP would touch AED111.4 billion in 2013, which is expected to go up to AED118 billion by the end of 2014. In 2009, the sector's contribution to GDP was AED99 billion. Dubai Investments has also announced that it expects AED800 million in net profits for the year 2013. The 148.9% projected net profit increase has largely been driven by the company's real estate and financial portfolio.
"2014 will mark a major change in the growth of the UAE real estate sector, especially that world economic recovery started with the Eurozone comeback and US housing growth pushing the mortgage lending and interest increase - all of which will become more robust and sustainable," said the study.
As investments continue to increase, property prices in the emirate continue to soar. In fact, prices have gone up by over 22% in the year 2013, according to research carried out by Reidin.com. Apartment sales prices registered an increase in November of 2.9% month-on-month and were up by 24.5% on an annual basis. Apartment values in Burj Khalifa have outstripped freehold units across the city with asking rates at or around AED4,000 a square foot.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. The year 2014 is set to be a game-changing year for the Emirates with rising property prices and rents, increased investment in the real estate sector and new developments being launched in preparation for the city to host the Expo 2020. We hope our round-up of key stories and expert opinions have helped outline the changes that we are bound to see in the coming year. We will continue to analyse the latest developments and ensure to keep our readers updated on the direction the market is heading.