Real estate sector’s contribution to Dubai GDP at 13.6% in 2018

Dubai Land Department, DLD, has said that the real estate sector significantly contributed to GDP growth in the Emirate. The improvement in economic growth rates in the Emirate of Dubai was accompanied by an improvement in the performance of the real estate sector, according to the DLD’s ‘Annual Report: Real Estate Sector Performance 2019’.

The contribution of real estate sector in the GDP reached 13.6 per cent in 2018, compared to 6.9 per cent in 2017 and 6.8 per cent in 2016, the report said. The construction sector’s contribution to the GDP reached 6.4 per cent in 2018, compared to 6.2 per cent in both 2017 and 2016.

The value of the gross domestic product in Dubai reached Dhs398 billion in 2018, compared to Dhs390 billion in 2017, with a GDP growth rate of 1.9 per cent in 2018.

To stimulate the GDP growth, the Government of Dubai launched a series of initiatives to promote the growth process and increase the economic activities in the Emirate. Reducing the cost of doing business, providing facilities to entrepreneurs, modifying the length of stay and providing long-term residence visa for up to ten years for investors and those with outstanding skills were those initiatives.

DLD’s Annual Report comprises four chapters, each covering a variety of topics, providing a comprehensive overview of the market performance in 2018.

The first chapter of the report covers the economic growth and role of the real estate sector in this growth, whereas the second chapter analyses the operational indicators of the sector.

Chapter three focuses on the performance of the real estate sector in the ease of doing business index, ownership registration, and the global real estate sector transparency index. Chapter four focuses on economic and real estate sector growth expectations for the coming year.

Commenting on the report, Sultan Butti bin Mejren, Director-General of DLD, said, “The report highlights DLD’s role and its keenness to strengthen its relations with all relevant parties, including developers, investors, and customers, and keep them up to date with the latest developments in the sector to establish the principle of transparency as well as help them make the right decisions based on comprehensive data.” He added, “Though the real estate sector reflects the development achieved by the Emirate across all fields, it does not come without its challenges.”

“On the one hand, we have to continue this momentum, which has been achieved through promotional initiatives at the local and global levels through our exhibitions in prominent Arab and international capitals. On the other hand, we should ensure transparent communication and openness to all investors and other parties in this sector.” The report provides a complete overview of real estate performance in 2018 through the analysis based on sectoral and macroeconomic indicators. The report provides a reference for all real estate stakeholders through which they can transparently trace and compare the performance of the sector over the years with other cities.

According to the report, Dubai’s real estate sector progressed in global competitiveness indicators. In the ease of doing business index, the UAE delivered outstanding results by ranking 11th globally, having advanced ten ranks among 190 countries.

This result is represented by Dubai as the largest business city and a result of improvements in a number of sectors, most prominently the real estate sector. The real estate registration index, which advanced three ranks in 2019 and ranked seventh globally, contributed to this gain.

In the 2014 -2018 global transparency index, Dubai ranked 40th in 2018, compared to 49th in 2014 and 48th in 2016. The Emirate’s ranking improvement was the result of a series of initiatives that have been implemented to serve the real estate sector, including the building classification survey project.

The year 2018 witnessed around 53,000 transactions worth Dhs223 billion, with overall Investments recording Dhs80 billion through more than 41,000 investments by over 31,000 investors from around the world.

The real estate investment results indicate an increasing growth in the number of corporate investors compared to individual investors. The percentage of individual investors decreased from 62.8 per cent in 2017 to 59.8 per cent in 2018, while the percentage of corporate investors increased from 37.2 per cent in 2017 to 40.2 per cent in 2018.

This increase reflects the ability of the real estate sector to provide investment options that attract corporate investors and effectively contribute in providing huge real estate investments in the real estate sector.

The Business Bay area ranked first in terms of the number of real estate transactions with over 4,000 transactions. It also maintained the first position in transaction value with over AED11 billion.

New investors represent 66 per cent of the total number of investors in 2018 while active investors represent 34 per cent of the total number of investors. In terms of the value of the investments, new investors represent 57 per cent of the total value of the investment in 2018 while active investors represent 43percent of the total value of the investments.

WAM