Global real estate consultancy Savills has revealed in its recent UAE Property Market Report that the region's real estate landscape is showing signs of recovery and revival amid the ongoing positive initiatives by the government.
The data from the report indicates a continual shift towards a knowledge economy. Several developments as well as some Smart Dubai initiatives "have driven the shift", according to the report.
The report also revealed that new business sectors such as vertical farming, cloud kitchen, fintech, start-ups, co-working and co-living sectors will continue to influence the UAE real estate landscape.
Residential demand has peaked; the share of first-time property renters in the UAE has increased in the last twelve months, with 30-35% of enquires received for vacant units in Dubai, and around 15% for Abu Dhabi.
In addition, the Global Labour Resilience Index has ranked UAE first in the Arab world and 21st globally as the most stable labour market.
Early settlement fees on mortgages have been capped to a maximum of 1% of the outstanding balance or AED10,000, as opposed to a previous 3% early settlement fee.
The region is on the right track in terms of sustainability, the report suggests. The Pearl rating system in Abu Dhabi and the recent launch of a sustainable real estate investment trust, the first green REIT to be introduced in the UAE, are among the various steps taken in this direction.
Commenting on the government reforms that are leading the change in the region's real estate market, chief executive officer at Savills Middle East, Steven Morgan, said: "The overall market sentiment is expected to improve and lead to an increase in enquiries and transactions as further clarity emerges over policies and reforms over the next few months."
He added: "With the establishment of a real estate committee in Dubai, the market witnessed a spike in the level of transactions in the last quarter in 2019, as well as an improvement in investor confidence.”