Future Forecast of Real estate market in 2019
As we all know in the third quarter of 2018, sales prices across the Real estate market registered quarterly declines of 1.4% and 1.3% for villas/townhouses and apartments respectively.
According to industry experts, in last few months, the property prices have fallen drastically and its expected that home prices will continue to fall by 5 to 10% residential prices fell by 6 to 10 percent in 2018. And this drop could be repeated in 2019.
The United Arab Emirates along with other regions of the middle east is experiencing a slump in real estate market mainly due to an increase in supply and other factors like a strong dollar rate and lower oil prices. However, the new visa reforms can create a lasting impact on the real estate industry in Dubai encouraging residents and investors to avail long-term residency benefits.
Being in early 2019, it’s important to understand what we can expect in the next few months;
Increase in residential supply:
We can expect to see an increase in residential supply towards completion.
According to industry experts, Prime residential areas, which saw relative resilience in 2018, may continue to see some improvement.
The leading industries:
The three leading industries in UAE as of 2018 reports were construction, manufacturing and real estate. According to the Dubai Statistics Center, these three sectors employ over 38% of Dubai’s total labor force with the construction itself over 28% of that sum. The next few months of 2019 will see similar growth in all three industries as an immense amount of construction is due for Expo 2020.
Hike in Interest rates:
We can expect interest rate hikes in 2019. According to latest reports, President Sheikh Khalifa has replaced legislation from 1980 which will allow the UAE Central banks much more flexibility in terms of lending capital to various sectors. It will have a positive impact when it comes to lending capital to real estate investors with new government regulations encouraging greater flexibility by banks.
Developers will embrace impactful communities:
Developers not just want to create properties in communities where people want to live in but also expect people to purchase for themselves. In 2019, developers will aim at following a trend of not just create properties in a community where people happily stay but also work and entertain themselves within the community. One such example is Executive Residences by Emaar which ushers a new era of entrepreneurship to the UAE. Have a look here
All in all, the housing market is estimated to improve in the coming few months with having good long-term and medium-term prospects. The long-term visa regulations for expats can raise expatriate incentives to purchase properties and raising demand in one of the Middle east’s largest and fastest growing sectors worldwide. With building a strong community base, developers can not only attract new buyers but also create an unrivalled experience overall and thus, contributing to the total GDP of the country while achieving a significant growth in infrastructure.