On trends shaping the future of the real estate market
How do you evaluate the real estate sector’s recent performance, and which trends will shape the market in the near future?
AL QATAMI: Over the past year the UAE government has implemented several legal and regulatory reforms to create a more welcoming environment for people of all nationalities, ethnicities and backgrounds. This inclusive approach has contributed to a significant increase in the population, with many people choosing to move to the UAE from overseas. The hospitality industry has thrived, as hotels have experienced high occupancy rates and new establishments have opened.
However, this increased demand has resulted in a shortage of residential properties, causing rental rates to surge, especially in high-end areas and beachfront locations. There has also been rising demand for commercial spaces, as people who have settled in the UAE are now starting businesses. This cycle of growth and stabilisation is expected to continue, further increasing demand for both residential and commercial properties before eventually reaching a point of balance.
Additionally, we have witnessed increased demand for luxury goods and services following the Covid-19 pandemic. People have shown a preference for luxury items such as cars, watches, women’s clothing and real estate. This can be attributed to a desire to enhance the quality of life after enduring difficulties during the health crisis. As a result, there have been price reductions and special offers in the luxury real estate market to attract customers. However, relying solely on the luxury market is not sustainable, and real estate firms are therefore offering both luxury and affordable housing options to cater to a wider range of customers.
In what ways are government efforts to enhance the local tourism sector impacting the real estate market?
AL QATAMI: Dubai has become a global city. There are large infrastructure developments, including numerous hotels, which are supporting the emirate’s hospitality industry, and this trend is expected to continue in the near future.
The government aims to enhance the tourism sector by further introducing new initiatives and hosting large-scale events similar to Expo 2020. The government’s intention is to provide differentiated experiences and cater to all visitors. There are also plans for investment in the expansion of the airport and Emirates’ fleet of aircraft.
The focus is on attracting tourists from around the world and maintaining Dubai’s status as a top tourist destination. This will undoubtedly have a strong and positive impact on the local hospitality real estate market, with potential long-term benefits for the residential segment as well.
To what extent are customer preferences changing due to technological advancements and sustainability trends?
AL QATAMI: It is essential for real estate firms to become closer to clients and meet their changing needs by focusing on aspects such as sustainability, wellness and technology. The population’s mindset is evolving, with the younger generation seeking healthier lifestyles and valuing different priorities. In terms of construction, it is crucial to choose contractors that prioritise quality, sustainability and climate change mitigation. The government is implementing regulations to enhance sustainability and promote greener areas. This relates to the broader concept of environmental, social and governance (ESG), which is increasingly shaping the strategies and agendas of many companies, including those in the real estate sector. By aligning with ESG principles, companies can demonstrate their commitment to sustainable practices, responsible business operations, and addressing societal and environmental challenges.
That said, while customers desire a high-quality living environment, the cost aspect cannot be ignored. Therefore, involving clients in understanding energy-saving practices and the associated cost benefits can enhance their overall living experience and build a stronger business case for real estate firms.
At the same time, technology continues to play a significant role in Dubai’s development. The emirate has made efforts to attract young, young, highly skilled professionals, in recognition of their potential in to shape the future through advancements like artificial intelligence. This, in turn, presents growth opportunities for local real estate developers to incorporate technology and energy-saving measures into development projects to meet the evolving needs and expectations of clients. By leveraging technology such as smart home systems or energy- efficient appliances, the aim is to make living spaces more convenient and environmentally friendly.
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