Despite a recession the investments remained in the country, showing the confidence of investors in the UAE economy, an expert said.
The start of 2012 has seen an emergence of a relatively positive economic outlook for the future of Dubai with the Economic Department stating that despite the recession in the UAE the majority of investors have not considered shifting their investments elsewhere. Additionally, the economy grew by 4% in 2011, 1.4% in 2010, and at the recent ‘Dubai Economic Outlook 2012’ Forum, it was said that Dubai’s economy is expected to grow by 4.5% in 2012. The UAE economy remains on track as pockets of stability and even further growth are to be seen.
After the financial crisis set off a real-estate slump that caused property values to fall by more than 60%, according to a recent HSBC report, almost half of all the construction projects in the UAE – worth around Dhs1.1 trillion – have been either put on hold or cancelled in response to falling demand and declining market conditions. When it comes to real estate, currently, there is still an oversupply of units, with the Dubai Land Department data showing that the number of sales during the fourth quarter of 2011 reached 2,605 compared to 1,589 in the third quarter.
Dubai-based Kele Contracting, one of the UAE’s most reputable contracting firms, believes that positive change is expected for Dubai and the region in 2012. Commenting on Kele’s role in construction in the UAE and the outlook for the year ahead, Kele Contracting CEO, Andrew Elias, said that positive growth was expected in the UAE and the region and that investment in construction projects will increase in 2012, increasing the supply of apartments and houses in the market.
He pointed out that the value of property transactions in Dubai has increased by 20% during 2011 reaching Dhs143 billion. Elias said that this was a good sign that investors are beginning to have confidence in the UAE again and predicted that 2012 will bring a further increase in growth.
“We believe that we are well placed to meet new challenges within the industry and are confident that we have the capabilities to play a contributing role in the continued growth, development and prosperity of the UAE and the region,” he added.
Furthermore, following the financial crisis, population demographics have slightly changed in Dubai and observations in trends and patterns in real estate have shown that currently demand has shifted towards more mid-range properties suitable for small to medium families.
“The 2011 had been a year full of doubts and challenges, however, while some areas of the Arab world were hard hit by social and economic changes, others have benefited from the Arab Spring, with investors and residents still confident that the region is stable.”
The region provides vast potential for investments particularly in property and real estate. 2012 will see steady and sustainable growth with signs of recovery and indications of a more positive future. With the current infrastructure, housing projects and development in place as well as that forecasted for the forthcoming decade, it is expected that the real estate sector in Dubai will continue to prosper.