Dubai’s real estate market yet to see Expo 2020 boost, say experts
Industry heads have no doubt about the positive effects of Expo, but has it started already?
Real estate experts in Dubai are split over whether the industry is already receiving a boost from the Expo-effect as the emirate gears up to host Expo 2020 Dubai.
According to statistics released by Property Finder, there have been a total of 68 real estate project launches in Dubai so far in 2019, representing a slowdown from the previous year.
However, the figures show that despite the muted pace of project launches, there has been a 33 percent increase in sales transactions between June and August, compared to 2018.
Kalpesh Kinariwala, founder and chairman of Pantheon Group, said the increase in sales can partly be attributed to the Expo.
He said: “The upcoming Expo 2020 is adding to the business confidence of real estate investors, and there is positive traction in the market. More professionals and experts are taking up residence in the city to support the preparatory work, and all core sectors – including aviation, tourism, retail, hospitality, logistics and financial services – are gearing up with new investments, which is ultimately energising the economy.”
In terms of overall transactions across the real estate market, over the year-to-date, overall transactions have grown by 14 percent compared to last year.
Swapnil Pillai associate, research at Savills, told Arabian Business that areas towards the Expo site, like Dubai South – which include projects such as Emaar South and The Villages – as well as other projects like Villanova, Arjan and Damac Hills in Dubai South East, have been experiencing strong demand.
He said: “If we look at how that might amplify over the coming year, we would anticipate a continued uptick in demand for residential, particularly at the right price points and those that offer excellent quality and well-planned design.”
According to an Ernst & Young (EY) report, the legacy period of Expo 2020 – estimated between 2021 and 2031 – is expected to contribute AED62.2 billion in gross value added (GVA) to the UAE economy.
The report estimates that within the total AED122.6bn GVA contribution of Expo 2020 from 2013–31, a resounding AED27bn can be attributed to the construction sector alone.
Sean McCauley, CEO of real estate marketing firm Devmark admitted that while he is confident Dubai will see positive effects from hosting the Expo, he’s guarded on whether these effects are being felt already.
He told Arabian Business: “It’s debatable whether the increase in transactions is directly attributable to Expo or not, however Dubai’s real estate market has proven to be massively sentiment driven in the past and overall investor sentiment has increased of late which may be as a result of the nearing of Expo to some extent.”
He added: “In the long term, Expo should have a significant impact on Dubai’s real estate market.”
Organisers of Expo 2020 Dubai are aiming to attract around 15 million unique visitors, with around 70 percent – or about 11 million – coming from overseas and the remaining consisting of 4 million local residents coming multiple times.
Some 200 countries will take part in the fair, which runs from October 20, 2020, to April 10, 2021.
Kinariwala said it will provide the perfect shop window for professionals and entrepreneurs, which, in turn, will satisfy the emirate’s burgeoning real estate industry.
“In addition to the resident population and the international investors already aware of the potential offered by the city, the new stream of people is also expected to invest in the UAE property market,” he said.
“A massive marketing to promote the Expo is likely to benefit the emirate for decades. The image of Dubai will long be in the mind of the global population, and this will definitely have a far-reaching effect on people’s ideas of moving to and settling in Dubai, attracting a new population to the city, ultimately giving the market some well-needed stability.”