With the worst of the oil price downturn over and a more proactive administration, the emirates are on the road to recovery
Despite price compression last year, the UAE real estate market will still deliver opportunity for domestic and international investment this year and beyond, according to Savills’ inaugural UAE market report.
The consultancy is confident the emirati governments’ investments into infrastructure, plus recent policy changes and a commitment to diversifying the economy, will ease the country further into recovery and growth.
“The UAE Government has made a number of bold, innovative changes to stimulate the growth of the economy and secure its long-term future,” said Steve Morgan, CEO of Savills Middle East.
The government has ramped up its budget for UAE Vision 2021, a strategy to make the country among the best in the world in time for the Golden Jubilee of the Union. The 2019 federal budget has been increased by 17.3 percent to AED60.3 billion (USD16.4 billion).
Key policy changes, such as foreign ownership and visa regulation changes, will also contribute towards recovery, Savills analysts noted. In September, the country announced that it would allow 100 percent foreign ownership in certain sectors. Visa rules were also changed to allow investors, entrepreneurs, exceptional students, and specialists to obtain five- to 10-year visas.
“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.”
Aided by an increase in oil production during the second half of 2018, the emirates’ collective GDP went up 2.3 percent in 2018, compared with an uptick of just 0.8 percent in 2017.
A sustained activity in the non-oil sector, which grew 3 percent, also contributed toward economic recovery. The growth was attributable to ongoing investments in Dubai’s highly awaited Expo 2020 and the UAE’s long-term focus on infrastructure development.
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