Contribution of Real Estate Market to Economy of Dubai

Dubai is one of the most unique and unusual regions in the world, especially in relation to its economic structure. For example, goods imported into the emirate are exempted from duty and import, while there are several free zones such as Dubai maritime city, Jebel Ali free zone, Dubai media city and Dubai internet city.  The role of these free zones is to attract foreign direct investment to the emirate. Currently, Dubai is home to one of the tallest buildings in the world known as the Burj khalifa, and other notable buildings include the Burj al Arab hotel.

                                                Apart from business, Dubai works hard to attract tourists and continue to develop themes to provide increasing options in terms of accommodation and activities. Dubai has some truly amazing resorts to attract both tourists and business visitors. The city has special zone free zones set up to attract particular industries. Many international companies such as Oracle, IBM, CNNN, Reuters and Microsoft have significant presence in Dubai

                                                 Real estate market in Dubai is booming due to the efforts of government to diversity into the tourist and service such as palm jumeirah and the world are being created on man-made islands, some of which are still under construction and have caught the attention of the world. Within the city you will find the tallest skyscrapers of the world and tallest hotel of the world, the Burj Al-Arab. Burj Dubai is currently under construction and will be the tallest building in the world when completed. Another project, which includes a new business district, consists of 500 skyscrapers.

                                                The real estate sector in Dubai is the main economic artery that has led to the transformation of the once desert country. Although, evidence shows that with the change in property freehold rights, the real estate sector of emirates was booming until early 2008 before collapsing, and effort are currently underway to revive the sector. Moreover, the contribution of major real estate companies to economy of dubai cannot be ignored, as more studies show that the companies are mega economy boosters for economy of dubai. Therefore the conclusion of the research paper is that the real estate sector is vital to the economy and efforts are needed and efforts are needed to  bring back the sector from the financial crisis

                                           One of the emirates of UAE, Dubai contributes to make positive contributions to the country’s economy, with statistics showing that the emirates of Dubai contributes approximately 29.2 percent of the UAE’S GDP. Since its establishment, Dubai has relied on oil revenues, which constitute 50 percent of the emirate’s GDP, but over time, the role of oil in the Dubai economy has declined. By 2004, oil accounted for 6 percent of the emirate’s GDP, and by early 2010, contribution of oil’s to Dubai’s economy had dropped to one percent

                                            Dubai’s real economic development is believed to have gained momentum in 1950s when the late sheikh Rashid bin Zayed Al Maktoum dredged the Dubai creek, which led to the expansion of the emirate and immediate repayment of the dept he had taken  to expand emirate  to the emir of Kuwait.

                                             In the late 1959, Sheikh Rashid established the Dubai airport and built the pioneer hotel in Dubai in the same year. As a result of these actions by sheikh Rashid, the first Dubai construction boom began in the early 1960s, which led to the emirate’s population increasing to 120,000 by the end of that decade. The construction boom included the construction of port Rashid, the presence of five-berth container terminal for large ships at the time and the discovery of oil in Dubai fuelled these construction. Furthermore, property construction in Dubai continued into the late 1990s as more and more impressive and gigantic buildings were erected in the emirate that elevated the emirate to global prominence. Such new buildings include a seven-star Burj Al Arab hotel, rated as the tallest hotel in the world

                                                In 2005, non-oil industries of Dubai contributed 94% of GDP. This is clear proof that the government has done the right thing by moving away from oil and focusing on their industries like tourism, hospitality and business. Over the past few years, economy of Dubai has shown some impressive growth patterns and in the same vein the government’s continued focus on making new policies is going to make sure that growth does not slow down anytime soon.

                                                The real estate sector contributed 7.2 percent of Dubai’s GDP In 2019, according to the Dubai Land department’s (DLD) annual report Real Estate Sector performance 2020, released as part of the international property show and investment in Dubai. With this report, DLD provides clients in the sector with a complete tool that allows them to acquaint themselves with the most important results attained. The report subject to provide a complete picture of the performance of the Dubai real estate sector by analysing all aspects of its performance and various financial and operational measures that affect its performance to regulate  its future trends

                                                 Real estate sector of Dubai is one of the key economic sectors in economic and actively contributes to the growth of its economy. The value of GDP of Dubai reached AED 407 billion in 2019 compared to AED 389 billion in 2018, a growth rate of 2.2 percent, contribution of the real estate sector to Dubai’s GDP reached 7.2 percent in 2079, with the sector growing by 3.3 percent compared to 2018 with an additional value of AED 29.4 billion. Real estate transactions witnessed a remarkable growth in 2019 in terms of number and value of real estate transactions and this progress continued in the early months of 2020. The growth rate achieved in the number of real estate transactions reached 8 percent in 2019. Compared to over 52,000 real estate transactions in 2018 57,000 real estate transactions. The value of real estate transactions reached about 226 billion dirhams in 2019 compared to 221 billion dirhams in 2018, a growth rate of 2.1 percent. Sales value in 2019 reached 81 billion dirhams compared to 77 billion in 2018, and this improvement in the value of real estate transactions was attributed to a significant growth in the value of sales and mortgages. The value of real estate mortgages reached 125 billion dirhams in 2019 compared to 120 billion dirhams in 2018, a growth rate of around 4 percent.

                                                The number of real estate investments in 2019 exceeded 47,000 investments, a growth rate of 18 percent compared to 2018, 40,000 real estate investments were achieved, and the number of real estate investors also achieved remarkable growth in 2019 compared to the previous year

                                                In case of real estate projects, a total of 1894 projects have been registered with Dubai land department (DLD) in freehold areas, of which 814 have been completed and 314 are under construction. In 2019 70 real estate projects were registered with Dubai land department and 14 were registered in first half of 2020. 69% of registered projects in 2019 are buildings, 24% are villa complexes and 7% are villas.

                                                As for the Ejari contract, 469,390 effective contracts were registered in 2019 as of contract registration date, compared to 448,564 in 2018, with a growth of 5%.

                                                An analysis of the performance of sub- sectors in the real estate sector shows that 17,000 housing units were added in the real estate sector in 2019, with a total area of 10,996 including units, villas, complexes, buildings and residential plots. Residential properties from projects completed in 2018 as on project closing date with a total area of approximately 1 km². Real estate transactions witnessed a remarkable growth in 2019 both in terms of number and value of real estate transactions and this progress continued in the early months of 2020.

                                                Dubai marina topped real estate investments in 2019 with 3920 investments; Business bay followed closely with 3508 investments; Al Khairan first with 3142 investments; Hadeq Sheikh Mohammed bin Rashid with 2833 investments; Burj Khalifa with 2721 deposits

                                                GDP of Dubai reached 110.8 billion dollar (407 billion dirham) in 2019, a 2.2 percent growth rate from 105.9 billion dollar (389 billion dirham) in 2018

                                                Although the emergence of covid-19 in December 2019 and its subsequent outbreak worldwide led to a decline in global economic growth rates, prodding all international institutions to lower their global growth forecasts for 2020, to avoid the consequences of the pandemic, dubai has introduced a package of measures and economic incentives to ensure business continuity and help various economic sectors overcome the epidemic, most importantly launching an economic stimulus package to support companies and the business sector in dubai. Increase financial liquidity among others, the report pointed out

                                                2019 reached a record high level in terms of the number and are of residential properties added to the real estate sector, which is expected as a result of preparation of Dubai to meet expected increase in demand at Expo 2020 before its postponement of 2021.

                                                In another way or another, the real estate sector has played a major role in making Dubai as a business hub and boosting the economy of Dubai as it is today.