- Home /
- Dubai real estate contribution to GDP nearly doubles to 13.6% in 2018
Dubai real estate contribution to GDP nearly doubles to 13.6% in 2018
The total value of real estate transactions fell 27.8 percent in 2018 to Dh223 billion, declining from Dh285 billion in 2017, according to statistics revealed by Dubai Land Department (DLD).
More than 31,000 investors and property buyers sold and purchased land and properties worth Dh223 billion through 41,000 transactions in 2018, DLD said.
“The real estate investment results indicate an increasing growth in the number of corporate investors compared to individual investors. The percentage of individual investors decreased from 62.8 percent in 2017 to 59.8 percent in 2018, while the percentage of corporate investors increased from 37.2 percent in 2017 to 40.2 percent in 2018,” The DLD said in a statement.
“This increase reflects the ability of the real estate sector to provide investment options that attract corporate investors and effectively contribute in providing huge real estate investments in the real estate sector.”
Real estate sector’s contribution to Dubai’s Dh398 billion Gross Domestic Product (GDP) reached 13.6 percent in 2018 compared to 6.9 percent in 2017 and 6.8 percent In 2016, it said. Construction sector’s contribution to the GDP reached 6.4 percent in 2018 compared to 6.2 percent in both 2017 and 2016.
Individual investors from the UAE ranked first in terms of the value of the real estate investments, with investments worth over Dh10 billion. Indian investors came second with investments worth over Dh8 billion in 2018.
The Business Bay area ranked first in terms of the number of real estate transactions with over 4,000 transactions. It also maintained the first position in transaction value with over Dh11 billion.
New investors represent 66 percent of the total number of investors in 2018 while active investors represent 34 percent of the total number of investors, and in terms of the value of the investments, new investors represent 57 percent of the total value of the investment in 2018 while active investors represent 43 percent of the total value of the investments.
In terms of the real estate projects activity, the number of completed projects in 2018 was 62, with buildings comprising 74 percent, villas 15 percent, and villa complexes 11 percent.
The number of new projects launched in 2018 was 84, comprising 20,000 units across villas, buildings, and land plots.
In terms of projects that are under construction, those registered with DLD in freehold areas only reached 102 projects in 2018 as per project registration date. The number of units expected to be added from these projects is 130,000, each bound by its respective expected completion date.
Analysis for the residential sector reveals that the number of completed residential units in freehold areas only and in accordance with the projects registered in DLD reached 7,469, excluding villas and villa complexes, with a total area exceeding 893,000 square metres.
As for the demand, which is expressed by both sales and rents, the report indicates that sales represented the largest percentage of real estate transactions, with more than 63 percent of the total number of transactions in 2018, worth Dh74 billion in 2018.
“The number of newly leased contracts reached 246,509, while renewed lease contracts reached 251,409 in 2018. From 2013 to 2016, new lease contracts were decreasing steadily against an increase in renewed lease contracts, whereas from 2017 until 2018, the numbers of both new and renewed lease contracts increased. However, the growth rate of new lease contracts was higher than that of renewed lease contracts, which reflects the additional demand on residential and non-residential units in the sector with the price correction in rents in Dubai,” DLD said.
The value of real estate transactions in Dubai during the first five months reached Dh106 billion compared to Dh95 billion in 2018, a growth rate of 12 percent. In light of this data, DLD represented the country in achieving seventh place globally in the real estate registration index.
In terms of real estate project growth, the first five months of 2019 witnessed the launch of 48 new real estate projects, which are expected to represent a new addition to the real estate sector. These projects ranged between residential apartments, villas, and villa complexes. Upon completion, they are expected to add approximately 8,000 new residential units to the real estate sector with a total area exceeding 730,000 square metres. Residential apartments represent the largest percentage thereof, compared to retail stores, offices, and other commercial units with 7,537 new residential units with a total area exceeding 668,000 square metres.
Sultan Butti bin Mejren, Director General of DLD, said, “Though the real estate sector reflects the development achieved by the emirate across all fields, it does not come without its challenges. On the one hand, we have to continue this momentum, which has been achieved through promotional initiatives at the local and global levels through our exhibitions in prominent Arab and international capitals. On the other hand, we should ensure transparent communication and openness to all investors and other parties in this sector.”