2019 … A YEAR IN REVIEW.
The decade that ended at midnight on December 31, 2019 can broadly be categorized generally as consisting of 2 halves. The first half witnessed a promising recovery from the ravages of the Global Financial crisis while the second half saw many of the gains from the first half disappear as the market became imbalanced and inefficient for a variety of structural, systemic and external reasons.
From a demand point of view, the news that Dubai sales transactions in 2019 were the highest in 11 years, recording a year-on-year increase of 20 per cent is an indication that the continuing fall in prices is finally starting to challenge buyer disinterest and reluctance. A post global recession record real estate transactions completed in Dubai of 41,988 for 2019 really highlighted how the combination of falling prices and unprecedented financing offers provided by developers could not be ignored by buyers any longer.
Over 55% of the transaction made in 2019 were for off-plan properties and the success of the affordability initiatives offered by developers along with investor inducements such as guaranteed rental returns will ensure that developer pricing and marketing strategies aren’t likely to change anytime soon.
Looking forward, the demand for property resulting from population growth is key. The impact of the 2020 Expo on population growth will be significant as human resources are recruited into the Emirate specifically for the Expo itself and for the increased economic activity that will emanate from hosting the event.
Foreign investment will continue to be a major demand driver for the industry and with 25 million visitors who are expected to attend the 2020 Expo, the opportunity for the industry to extoll its virtues as a safe and lucrative investment alternative is unprecedented. We can expect to see increased interest from abroad, particularly as initiatives such as long-term visas for investors and increased regulatory oversight on the industry and transparency regarding future supply pipelines represent compelling reasons to consider investing in Dubai.
Of course, the industry will continue to be buffeted by Global uncertainty. The pace of resolution of many of the geopolitical events of the past five years that have hindered global economic growth and heightened global uncertainty are still some way from complete resolution. The industry will continue to be affected by these events and issues as they affect, not only factors such as economic performance, trade policies, exchange rates and monetary / fiscal policies of virtually every country in the world, but also the confidence of investors globally.
2019 will be bettered by 2020, but it will only be a small step towards total recovery.