Positive forecasts for the real estate market in the UAE ahead of Expo 2020.

The company JLL (Jones Lang LaSalle) stated that despite the recent decline in real estate prices in the UAE, forecasts remain positive for the market in light of the upcoming Expo 2020, which is expected to stimulate activity in various real estate sectors, including residential, commercial, and hospitality.

Dana Solbak

The Senior Director of the Research Department at JLL for the Middle East and North Africa noted that the decline in real estate prices in the UAE is due not only to internal factors but also to more significant external ones, and it is forecasted that "the decrease in prices will continue over the next 12 months."

The report from the Central Bank of the UAE for the third quarter of this year states that the residential real estate market continues to decline, especially in Dubai, where prices have dropped by 7.4% compared to last year and by 2.5% compared to the previous quarter. The average price per square meter was 12,800 dirhams ($3,480), and rental rates fell by 9.6%.

According to the Central Bank, real estate in Dubai lost 6.1% of its value in the third quarter compared to the same period in 2017, with prices falling by only 1.8% compared to the previous quarter.

Solbak noted that in addition to internal factors such as increased supply and decreased demand, there are several external factors, including falling oil prices and overall economic instability, that have negatively impacted investor confidence and economic activity.

She added that expectations remain positive regarding Expo 2020, which will boost the development of various real estate sectors, as well as the positive economic growth confirmed by the Central Bank's analysis of the domestic and global economy for the third quarter, starting from that quarter.

JLL forecasts a further decline in property purchase prices next year before the new government rules and laws come into effect. In Abu Dhabi, a short-term slowdown is expected, but there are positive long-term prospects due to the launch of the first phase of the +21 program, which will create a more favorable investment environment.

According to Solbak, government actions such as granting 10-year visas to certain categories of foreigners and allowing full foreign ownership of companies outside free zones are key to stimulating the real estate market, as well as the out-of-state impact on free zone sectors.

She is confident that the recovery of oil prices in the third quarter will also positively impact the demand for office spaces in the future, thanks to the increase in jobs, which will balance the effects of the integration of key entities in Abu Dhabi, such as ADNOC and Mubadala.