There has been a significant rebound in real estate transactions in the UAE during the first half of the year mainly buoyed by confluence of factors, according to Kuwait Financial Centre (Markaz).

 

Bright macroeconomic prospects, underpinned by rising oil prices, a higher vaccination rate among its population and global events like Expo 2020 Dubai, are expected to stimulate the rebound of the UAE’s real estate sector for the coming years, stated Markaz in its 'UAE Real Estate Outlook H1 2021' report that features indicators signifying positive signs of sustained recovery for the country’s real estate sector. 

 

The country’s economic recovery from the repercussions of the Covid-19 pandemic has been on an upward trajectory since the third quarter of 2020. Diminishing government deficit along with an increase in expenditure growth and improving employment rate further demonstrate the economy’s resilience, it added.

 

"The investor-friendly government policies incorporated to mitigate the impact of the virus, such as the 10-year golden visa program and 100% foreign ownership of commercial companies, as well as the new reforms in mortgage lending and the efforts taken to restrict new supply are positives for the real estate sector and the investment environment in the country,' Markaz stated in the report. 

 

Further, the Kuwaiti group said residential rental gross yields in UAE remained relatively high (nearly 6%) when compared globally. 

 

"Adding to that, UAE have witnessed the highest population growth in the Gulf region. This along with long-term plans for urban and sustainable development under the Dubai 2040 Urban Master Plan are expected to incentivize investors who are looking for a steady stream of income," the report added.

 

In a positive step, the government also increased mortgage lending limits by 5% in March last year. In addition to this, Abu Dhabi removed property and mortgage transfer fees to ease the availability of financing and facilitate real estate transactions. 

 

Similarly, the country has launched initiatives, including the establishment of a higher committee of real estate, to achieve a balance between real estate supply and demand, considering that over-supply has caused the property market to slow down significantly – resulting in stalled projects, redundancies, and a lack of confidence in the sector. 

 

Separately, the Dubai Real Estate Regulatory Agency (Rera) has introduced a new law that forces developers to deposit 50% of the project's construction cost upfront compared to 20% previously to curb future supply, the report added.