Savills releases first UAE market report
Savills, one of the world’s leading real estate advisors, has released its first comprehensive view of the United Arab Emirates, The UAE Property Report. According to the specialist report, the UAE Government’s increased investment into infrastructure, its commitment to diversifying the economy and positive regulatory changes have paved the way for economic recovery and growth. The dedicated country report, compiled by Savills’ experienced team based in the United Arab Emirates, assesses the state of the current real estate market with particular focus on the residential, commercial and industrial sectors. Savills identifies the UAE as ‘one of the great success stories of the Middle East’, that is looking to the future through bold moves such as visa liberalization and increasing government spending on infrastructure.
It is estimated that UAE GDP growth will accelerate from 2.3 per cent in 2018 to 2.9 per cent in 2019 according to the World Bank and Oxford Economics. The International Monetary Fund (IMF) recently quoted even higher potential growth rates of 3.7 per cent for 2019. According to Savills, this growth is stimulated by an increasingly diversified economy and private sector investment. Savills’ report underlines that the non-oil sector grew by 50 basis points in 2018 to 3%, driven by ongoing investments attributed to the upcoming Expo 2020 in Dubai and the country’s long term focus on infrastructure development.
In the real estate market, supply addition in the residential sector actually witnessed a year-on-year decline as developers focused on consolidating their operations and completion of existing under-construction and launched projects. The level of existing supply combined with new launches caused price value drops across most UAE markets, while both capital and rental values witnessed year-on-year decline. This has created a buyer / tenant’s market, with developers currently offering generous payment plans and schemes.
Within the overview, Savills acknowledges that price compression across the real estate market continued through 2018, but with the inspirational focus of the UAE Vision 2021 and steps taken to achieve its goals, the UAE real estate market can deliver opportunity for domestic and international investment over 2019 and beyond.
Steve Morgan, CEO of Savills Middle East said: “The UAE Government has made a number of bold, innovative changes to stimulate the growth of the economy and secure its long-term future. Through both public and private sector investment, we envision the UAE will continue its progress towards a diversified economy and a more mature real estate market. There is still some way to go towards recovery but we are starting to see investor optimism return.”
Savills compiled the report from business data acquired across residential, commercial and industrial sectors throughout the UAE. Savills carries out around 10,000 valuation instructions per year and represents many globally significant companies and organisations looking for commercial space in the Middle East.
“It is our job to unearth opportunities, gaps in the market and find alternative ways of looking at real estate for our clients. Under the right conditions, the UAE is trending towards a positive opportunity for investors.”
