Detailed Analysis of the UAE Property Market: A Comprehensive Report

This report provides a comprehensive analysis of the property market in the United Arab Emirates (UAE), with a specific focus on the real estate sector in Dubai. The study examines the background of the Dubai commercial real estate market, its contribution to the UAE economy, and the impact of economic factors such as the 2008 recession. It outlines the aims and objectives of the analysis, detailing the research methodology used, which includes secondary research and a deductive approach. The report explores the concept of the property market, the overview of the Dubai economy, and the current issues faced by the Dubai real estate market, including infrastructure challenges. It also reviews the hospitality, office, residential, and retail sectors. Furthermore, the report identifies factors influencing investor decisions, potential effects of the global real estate crisis, and concludes with key findings. The study uses data from various sources to provide an overview of the current trends and challenges in the UAE property market.

Running head: PROPERTY MARKET ANALYSIS
Property Market Analysis
Name of the Student:
Name of the University:
Author’s Note:

2PROPERTY MARKET ANALYSIS
Executive Summary
This current report deals with the situation of the real estate market in UAE. Dubai real estate is
one of the growing business sectors in UAE. This sector contributes more to UAE economy.
However, in 2008 and 2009 due to the economic recession Dubai real estate had faced many
issues, which affected the growth of the real estate in UAE. After the year of 2010 significant
growth has been seen in Dubai real estate market. UAE government has no tax on the rental
income, which influences the foreign investors to invest in this country as well as in the real
estate market. On the other hand, to decrease the dependency from the oil and gas sector, UAE
government focused more on real estate business, which is another reason for the enhancement
of real estate property in Dubai.

3PROPERTY MARKET ANALYSIS
Table of Contents
Introduction .....................................................................................................................................4
Background of the Dubai commercial real estate market................................................................4
Aims and Objectives........................................................................................................................5
Research methodology.....................................................................................................................5
Literature Review............................................................................................................................6
Concept of the property market...................................................................................................6
Overview of the Dubai economy and real estate finance............................................................6
The current issue of Dubai real estate market.............................................................................7
Overview of the hospitality sectors.............................................................................................7
Overview of the office, residential and retail market in Dubai...................................................8
Off plan sale in the UAE real estate market................................................................................8
Overview of Dubai real estates in 2016 and 2017.......................................................................9
Factors that lead the investors to invest in Dubai real estate market.........................................10
Potential effect of the global real estate crisis on UAE real estate market................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

4PROPERTY MARKET ANALYSIS
Introduction
Property market analysis or real estate market analysis refers to the study of present market and
the values of the property. Property market analysis focuses on the performance of the
commercial property, retail industry and other industries (Dziauddin & Idris, 2018). However,
real estate economics include a technique that describes and explains supply, demand and the
pattern of prices. Real estate is a durable property. The stock of a real estate supply can be
measured based on the last year stock, existing stock, deterioration, and rate of renovation of
current stocks. In 2018, the residential rental price of Dubai has dropped. As a result, property
price has declined in the recent year in UAE market. This study deals with property market
analysis in UAE and the current position of the real estate.
Background of the Dubai commercial real estate market
The commercial real estate market in Dubai has a great contribution to UAE economy. This
property market contains long-term health in comparison to other property markets. UAE
government focuses on the development of real estate property as well as the housing property
for families, hotels, hospitals, shopping mall and corporate sectors. The aim of developing
housing apartments is to protect the households and demography of the citizen's residential areas.
The main purpose of selling land or house is to buy another land or house. At present, the real
estate property market has been proliferating in UAE, which highlights the economic growth of
this country (Abouraia, 2016). According to the property law of UAE, the buyer of land or house
should be a UAE national. Therefore selling and buying of property should not have any
connection with the financial and legal liabilities. On the other hand, the sales price of the
property should not be less than the current market value. The department of the land and
property in the Dubai only allows the buyer to buy the property if all these above criteria are
fulfilled. The main target audience of the UAE, real estate market, is the 35 to 55 years age
group of people as this age group is mostly involved in purchasing and selling the property. The
commercial real estate in Dubai includes housing apartments, office, educational sectors, and

5PROPERTY MARKET ANALYSIS
shopping mall and so on (Eid Mohamed, Elkaftangui & Farouk, 2017). Middle age group people
are associated with the selling and purchasing of this property.
At present Dubai, real estate market has been facing an infrastructure issue. However, according
to the property builder of Dubai, commercial property market leads Dubai to get a good position
in the international market. Hence, property builders of Dubai have been building many
properties, which are not less than other developed countries such as US, Australia and Japan
(Rogmans & Ghunaim, 2016). However, property price in Dubai is at an unprecedented level,
and this is notwithstanding the trend of the global recession. The investors, as well as the
companies those are operating in Dubai, have reported that infrastructure of the real estate is not
in good condition, which is a major barrier to this target property market. One of the major
drawbacks of the infrastructure of the real estate property in Dubai is the shortage of water and
electricity. Based on this current issue real estate builders in this country have decided to install
their power generation. There is a need for comprehensive policy to improve the infrastructure of
the real estate in Dubai.
Aims and Objectives
This study aims to analyze the situation of the current property market in UAE.
The objectives are as follow:
 To understand the current situation of UAE property market
 To analyze the current growth of Dubai real estate
 To identify the major issue of Dubai real estate market

6PROPERTY MARKET ANALYSIS
Research methodology
Research methodology is a crucial part of every research study as the success of a research study
is based on its methodology. In this current study, secondary research methodology will be taken
to collect the data. Positivism research philosophy will be selected in this study. Positivism
philosophy is associated with the sensory and natural information. This philosophy relies on the
logical and scientific information (Abouraia, 2016). Data are collected from the exclusive
sources based on this philosophy. Therefore, the deductive approach will be taken in this study.
Deductive approach is based on the existing theory and models. In this research study, the
descriptive design will be selected as the research design. The descriptive research design is
based on the viewpoints of the individuals, case study, and perspectives of the participants.
However, information will be collected from an authentic journal, and the journals are searched
from the databases. Inclusion and exclusion criteria will be used to select the journals in this
secondary research methodology. Valid and reliable journals will be selected to find an authentic
data based on UAE property market. Current information will be taken to complete this study.
Literature Review
The concept of the property market
Property market refers to the land, building, retail industry and other business industries of a
country. Real estate is one type of property market that contributes a good proportion to the
economy of the country. Real estate is of two types that are the residential real estate and
commercial real estate. The residential real estate includes housing property, and the commercial
real estate includes hotels, shopping malls, educational sectors and office. However, apartment's
buildings are also categorized under the commercial real estate though it is a residential property.
Commercial real estate property enhances the economic growth in UAE. The property price is
high as there is a high demand for the land and buildings in Dubai. Price of the vacant land is

7PROPERTY MARKET ANALYSIS
high in UAE market, and the seller becomes successful in this section. However, vacant land
includes higher commission percentage (Hussain, Shahmoradi & Turk, 2015). This is a major
aspect of real estate business. In commercial property business, the level of income is better if
people show better in this section.
Overview of the Dubai economy and real estate finance
Economic growth of Dubai is good as it has high GDP; however, due to the economic recession
in the year 2008, the property market of Dubai was affected. As per the Economic Intelligence
Unit Forecast, it has been predicted that the GDP growth in UAE will rebind by 2.9% in between
the year 2018 to 2021. Despite this, there are some economic headwinds in the UAE economic
market that will bring a great threat to real estate market (Gulfnews.com, 2018). It has been
observed that real estate market contributes 1/3 of the total GDP of UAE. However, the price of
commercial property has fallen due to the economic recession, which created a big barrier for the
property owner to enhance their profit margin.
In this present years, the owner of the real estate in Dubai focuses on the low rent of the
commercial property, which decreases the sales. However, though sale decreases but the stability
has taken place in Dubai real estate market. Therefore, with the less price of the property real
estate property owners have less risk in the business, which is a positive aspect of offering
property at a low price. The property seekers and the agencies focus on the off-plan sales in UAE
market, which leads them to gain more in the real estate market. In the year 2017, the price of the
property has declined, which is predicted to recover in this current year by offering more
products and new market segments in the real estate industry (Gulfnews.com, 2018).
The current issue of Dubai real estate market
Dubai real estate market is a growing industry of UAE. However, owners of this property market
have been facing infrastructure issue regarding the residential and commercial property. Shortage

8PROPERTY MARKET ANALYSIS
of the electricity and the water is the major barrier to the corporate office and the residential
property (Huston, Simon, Han, & Hoon, 2014). Hence, it is difficult for the property builder to
cope up with this issue and enhance their sales. Hence, Dubai real estate owners need to adopt a
comprehensive policy to overcome such infrastructure issue in the real estate market. It is crucial
for real estate builder to comply with the government rules to reduce the infrastructure issue and
to give a better offer to the target market.
Overview of the hospitality sectors
Hospitality market is one of the major aspects of the commercial real estate property. However,
Dubai invests more in the development of tourism infrastructure to attract the tourists (Abidoye
& Chan, 2017). Dubai parks and resorts, IMG world, Dubai Water Canal and Expo2020 are the
major tourist attraction of Dubai. On the other hand, Dubai government and other real estate
builders invest more in the mid-market hotel provision. It has been predicted that approx 23% of
hotel rooms will be increased by the year 2020. Despite such growth, the hospitality sector of
Dubai has faced challenges in the year 2017 due to the slow economic growth in this market.
Therefore, the introduction of the local currency made Dubai an expensive destination for local
as well foreign visitors. Despite these challenges, Dubai has maintained itself as one of the top
tourism markets in the global tourism industry. The visitor’s number and the performance of
hotels lead Dubai to get a good position in the world’s tourism industry. Occupancy of the hotel
in Dubai was 75% in the year 2017 that is highest among the other hospitality sectors in the
global market (Gulfnews.com, 2018).
Overview of the office, residential and retail market in Dubai
In 2017, the international grade A offices are performed well with the single ownership. The year
2017 was very challenging for the retail sectors in Dubai. Despite financial challenges, the Dubai
Mall, Mall of Emirates and City walk were successful to attract the tenant demand and footfall.
In the year 2016, retail spending has fallen between 5% to 6%, and this was the first time when
retail spending has decreased in UAE after the recession in 2008 (Gulfnews.com, 2018). 2017

9PROPERTY MARKET ANALYSIS
was very challenging for the UAE retailers due to the local currency and low domestic
disposable income. These two factors reduced the purchasing power of the international visitors.
Such slow demand leaves a pressure on retail rents; as a result, the landlords offer an incentive to
gain the attention of key tenants. In the context of the residential property the rent, sales price,
and the transaction have been declining since 2016. In the year 2015, the price declined 6.3%.
Due to the low oil price, the residential price has declined. In 2017, the domestic supply has
increased 2.5%. Such enhancement of property prices in the year 2017 is a great opportunity for
the real estate owner.
Off plan sale in the UAE real estate market
2017 is considered as the year of change in the real estate market in Dubai. Introduction of the
off-plan sale opens new opportunity in the sales market of UAE. The rental rates become lower
this year. Many real estate developers offer an attractive payment plan to buyers with low price,
which increases the sales in the property market (Bodolica, Spraggon, & Shahid, 2018). This off
plan sale brings many opportunities for the real state builders. 2017 is the dominating year for
the Dubai real estate. Sale has increased up to 55% in this year in the property market. According
to the statistical data, there was 18,657 off-plan apartments sales transaction. Apartment sales
price increased up to 0.1% in the year 2017 (Gulfnews.com, 2018). Due to decline in the oil
price, the rental price has fallen in Dubai that highlights a big threat to rental income. In the year
2017, almost 7,000 residential units are developed in the real estate property in UAE.
Overview of Dubai real estates in 2016 and 2017
2017 is considered as the most significant year for Dubai real estate market as this year is the
combination of ups and down and leaves a major impact on UAE property market. GDP of
Dubai was stable in the year 2017. It was 3.2% and expected to increase up to 3.5% in the year
2018 (Gulfnews.com, 2018). The highly attractive business environment in Dubai attracts the
foreign investment, which ensures the growing economy of UAE. Dubai is considered as the
most globally diverse place as there are 200 nationalities. This country is considered as the most

10PROPERTY MARKET ANALYSIS
appealing destinations for the real estate investment in the world. According to the statistics of
Dubai Land Departments, in 2016 approx 60,595 real estate transactions took place in Dubai.
From such transaction Dh259 billion is added in UAE economy. On the other hand, the year
2017 also focuses on the high foreign investment in Dubai commercial real estate market.
Approx Dh344 billion is gained from 22,834 foreign investors belongs to 136 nationalities.
However, Dubai overtook London as it is considered as the most preferred location for property
investment. Chinese investors have great demand for Dubai to invest in the commercial property
market. However, the foreign investors believe that Dubai is a safe destination for investment as
it gives long-term return (Agarwal, 2017).
As per the report of Global Capital Partners, the total return of the commercial real estate of
Dubai varies from 5 to 11 percent. In the context of Dubai, the majority of the return from the
investment in commercial property market comes from the increase in rental prices (Buckley &
Hanieh, 2014). However, Dubai is popular in global commercial real estate market due to its
creative design, construction method and luxury apartments. This makes Dubai unique among
the other countries in the context of the property market. Dubai market needs more players in
residential and commercial real estate market as it will make them develop a diversified real
estate market in the international market. Due to the growing population and visitors, the
hospitality sectors of UAE needs to provide high-quality housing at an affordable price. On the
other hand, in the residential market, the young professionals are looking for affordable housing
and apartments. It is important for real estate owner in Dubai to identify the current needs of the
market and to meet them properly.
Factors that lead the investors to invest in Dubai real estate market
The main focus of the investors is short-term capital appreciation, which can be done through the
investment in Dubai property market. However, the buyers have an intention to get a good return
on the investment (Diaz & Hindro, 2017). The investors look for higher yield in the property
market thus they need to observe the property prices of different locations in UAE. Different
middle market locations such as Discovery garden, Dubai sports city, and Remraam are the most

11PROPERTY MARKET ANALYSIS
popular cities in Dubai that are preferred by investors to develop housing or commercial
building. UAE property market offers the foreigners to own single commercial property such as
wear house units and retail office at a pocket-friendly rate. However, in China real estate market
is very volatile as a result; they tend to invest in UAE real estate market as it gives them a long-
term outcome. In China, there is an extension in the maximum projects; as a result, the delay
occurs in the project, which leads the Chinese investors to invest their capital in Dubai real estate
market.
Investors have to maintain formality in many countries while purchasing a property. However, in
Dubai, the investors can purchase the property easily paying the money to the owner. The
government rules and policies are easy to follow, and there is less complexity in the foreign
investment in Dubai. On the other hand, the geographical proximity of Dubai is another positive
aspect of such country, which attracts the foreign investors to invest in this country (Al-Mohana
& Hatemi, 2016). Many foreign investors come to Dubai easily and spend their capital in Dubai
real estate market. Purchasing of real estate in Dubai is a good business strategy as UAE
government does not charge any tax on the rental income. This gives a big opportunity to foreign
investors to invest in Dubai real estate market.
The potential effect of the global real estate crisis on UAE real estate market
To reduce the dependency from oil and gas sectors, UAE government has focused on the tourism
industry and real estate market to enhance the economic growth of this country (Baum, Mackmin
& Nunnington, 2017). However, UAE is considered as the global hub based on its continuous
development. The primary aim of such global hub is to provide sufficient accommodation to the
foreigner investors who want to stay in this country. Dubai is the first city of UAE that enters in
real estate market. Real estate sector of Dubai is the most growing business sector in this city.
Dubai real estate sector is larger than the hydrocarbon economy in this recent year. Before the
global recession, UAE was performing well in real estate market. However, the global recession
between the years 2008 to 2009 affected the performance of UAE real estate market. Therefore,
the contribution of real estate market in UAE economy was declined due to this global recession.

12PROPERTY MARKET ANALYSIS
Growth started to rebound in the year 2010, but it was very slow (Al-Mohana & Hatemi, 2016).
This real estate sector was the most growing sector of Dubai thus; the decline of this sector left a
major impact on the UAE economy. For the foreign investors, it was difficult to recover their
funds during this time. In 2012, the growth of Dubai real estate was restored, but the recovery
process was prolonged. After the year 2013, significant growth has been observed in Dubai real
estate sector. In the year 2014 due to the overgrowing expatriate population in Dubai, the
demand for commercial and residential property has been increasing rapidly till now. This
highlights the good opportunity for the real estate sector to enhance their business in UAE
(Tierney, 2017).
Conclusion
The entire study deals with the property market analysis in the context of UAE. It has been found
that real estate business is growing in Dubai in the recent years. The economic recession in 2008
left a big negative impact on Dubai real estate market. This condition began improving in 2010.
Dubai real estate market has a great value in the global real estate market as this market is trendy
in Dubai. The rule of the UAE government is favourable for Dubai which enhances its real estate
market. Foreign investors have to pay less tax for their business, which adds great value to Dubai
real estate market. Among the other developing country, Dubai has got a good position for its
real estate business.