Egypt’s Minister of Investment and Foreign Mohamed Farid recently met Ryan McLaughlin, CEO of the Northern Virginia Association of Realtors (NVAR), to discuss exporting Egyptian real estate and attracting international developers to the local market, which presents integrated investment opportunities across new cities and economic zones.

Discussions between the two, as per Arab Finance, also covered transferring US expertise in improving Egypt’s real estate technology, particularly in areas like data centres and smart buildings. There will also be a field visit for an American delegation, which will tour the North African country’s major national projects and logistics zones, in order to attract foreign capital and strengthen the nation’s position as a destination for high-quality real estate and technology investments.

In the coming days, there will be a series of promotional tours and investment events in the United States that will showcase Egypt’s real estate portfolio. The NVAR delegation, in return, will explore opportunities in the New Administrative Capital and other new urban developments. Farid and McLaughlin also discussed cooperation with the Export Council of Real Estate to exchange data, a key step before signing a memorandum of understanding (MoU) aimed at strengthening collaboration in promoting Egyptian real estate abroad.

According to Farid, Egypt currently offers fully serviced land and advanced infrastructure tailored to real estate and industrial developers seeking expansion in the Middle East and Africa. His ministry is also working to facilitate property ownership procedures for foreign investors and expand coordination with relevant entities to support the North African country’s real estate export-related efforts. Egypt already possesses a diversified portfolio of serviced land developed to international standards, supporting both real estate and industrial investments.

The NVAR delegation reportedly expressed interest in facilitating investments by American developers in Egypt, citing key advantages like the country’s strategic geographic location, its network of submarine cables, and its potential in renewable energy for technology and logistics-related projects.

NVAR, which includes more than 13,000 certified real estate professionals and represents over USD 19 billion in annual transactions in Northern Virginia, has an extensive network connecting major developers and global investors. The American region has also emerged as a major global hub for data centres, handling a significant share of global internet traffic.

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The decision follows a raft of actions since 2023 to end COVID-era concessions for foreign students and workers in Australia that helped businesses recruit staff locally while strict border controls kept overseas workers out.

Concerns over immigration

“There are about 10% more international students in our universities today than before the pandemic and about 50% more in our private vocational and training providers,” Education Minister Jason Clare told a press conference, while adding, “The reforms are designed to make the international student sector better and fairer, and this will set it up on a more sustainable footing going forward.”

International education is one of Australia’s largest export industries and was worth A$36.4 billion ($24.7 billion) to the economy in the 2022-2023 financial year. However, polls have shown voters’ concerns about large influxes of foreign students and workers putting excess pressure on the housing market, making immigration one of the potential major battlegrounds in an election less than a year away.

Net immigration hit a record high in the year to September 30, 2023, surging 60% to a record 548,800, higher than the 518,000 people in the year ending June 2023. Australia boosted its annual migration numbers in 2022 to help businesses recruit staff to fill shortages after the COVID-19 pandemic brought strict border controls, and kept foreign students and workers out for nearly two years.

However, a new report asserts that there is no basis for blaming international students for an undersupply of housing or rising rental fees in Australia. Research commissioned by the Student Accommodation Council, a peak body for the country’s purpose-built student accommodation sector (PBSA), found no alignment between the return of international students to Australia and rents increasing.

Instead, the report mentions, “Rents began rising in 2020, when there was no international student migration and most students had returned home. Between 2019 and 2023, median weekly rent increased by 30%. Over the same period, student visa arrivals decreased by 13%.”

The research further found that international students make up only 4% of all renters in Australia. Domestic students compose 6.2%, and the remainder are non-students. Also, the majority of international students do not live in the houses. Only 3% live in detached houses suitable for couples or families, while 74% live in PBSA (Purpose Built Student Accommodation) close to universities.

The Student Accommodation Council attributed the housing crisis in Australia to “a complex web of supply and demand drivers, including the rise of smaller and solo-person households, intrastate migration, rising construction costs, planning delays and a trend to re-purposing second bedrooms into home offices, amongst others.”

The study has pointed out a great need for increasing the supply of PBSAs, since vacancy rates in major Australian cities are currently around 1%, and rental prices have been climbing for months.

The Student Accommodation Council also mentioned that looking at the pipeline of new PBSA currently (7,770 new beds), there will not be enough supply to ease pressure on the rental market from international students by 2026. That would only be accomplished if there were 84,000 beds ready by that time.

Provinces feel the pinch

New data has revealed that the province of Victoria is grappling with an unprecedented property crisis, with more people in housing stress than any other part of Australia. Housing advocates have urged the government to urgently act on social housing, pointing out that the state needs over 6,000 new homes each year for the next decade.

The Australian Institute of Health and Welfare reported that “the top 10 months on record for people in housing stress visiting specialist homelessness services all belong to Victoria.”

“Victoria’s numbers are critical, with approximately 30% more individuals in housing stress and seeking assistance compared to New South Wales or Queensland. This is the face of Victoria having the lowest amount of social housing as a proportion of total housing stock in Australia, with just 2.9% of dwellings being public or community housing,” CityHub reported.

“These unprecedented levels of housing stress will increase homelessness unless we act urgently to build more social housing,” Council to Homeless Persons CEO Deborah Di Natale told the media.

Post-COVID housing stress has been especially intense in Queensland. Brisbane property prices have climbed by 65% since the beginning of the pandemic, almost doubling the Australian capital city average (34%).

According to new data released by CoreLogic in June 2024, Brisbane now has the second-most expensive housing in the country, behind Sydney. Prices rose by 1.4% in May, with the median property price hitting $843,231. Across the state, new tenancy rents have gone up by 45% in just four years. Adjusted for inflation, that’s a 23% increase in real terms, much more than the residents’ income growth.

Soaring rents have squeezed people on lower incomes particularly hard. As per the City Futures Research Centre, UNSW Sydney, the share of new lettings at rents low-income households can afford has slumped from 23% to 10% of all private tenancies since 2020. And less than 1% of available Queensland rentals in March 2024 were affordable to a single person earning minimum wage or a pensioner couple. These conditions are pushing some people into homelessness, with “tent cities” appearing across Brisbane.

To combat this, the provincial government has started a flurry of constructive housing policymaking. Queensland has begun to reverse a long-term decline in its social housing stock, apart from boosting homelessness funding and services. However, the sector called “Social Housing” has been in a long-term decline across Australia. Investment has been minimal since the 1990s. By 2021, social housing was down to barely 3% of all occupied dwellings in Queensland.

However, in the past five years, due to the increasing state investments, the number of social housing dwellings has begun to grow. The Queensland government pledged in early 2024 to add 53,500 social housing units by 2046, expanding the stock of public and community housing by 73%.

Compatible with this target, a medium-term goal is to expand annual output to 2,000 units by 2027-28, a fourfold increase in the late 2010s. Adding 2,000 social housing units a year by the late 2020s would reverse the sector’s historic decline. If sustained over time, it would begin to expand social housing back towards 5% of all housing, where it once was.

All eyes on policymakers

The 2024-25 Federal Budget has unveiled a series of initiatives aimed at bolstering housing supply and supporting the construction sector. The government will collaborate with states, territories, and local governments to introduce reforms enhancing housing supply and affordability as part of the National Housing Accord over the next six months.

Key measures to incentivise housing supply include reducing the withholding tax rate for eligible managed investment trust fund payments attributed to newly constructed properties. Additionally, the capital works tax deduction (depreciation) rate for newly constructed build-to-rent developments will increase from 2.5-4% per year, potentially unlocking 150,000 new rental properties over the next decade.

The National Housing Finance and Investment Corporation’s liability cap will be raised by $2 billion, facilitating more lending to community housing providers for social and affordable housing projects. Furthermore, $350 million over five years has been committed under the National Housing Accord to support the delivery of 10,000 affordable homes by states and territories.

The government is also in discussion with states and territories to make an additional 300,000 TAFE and vocational training places fee-free, focusing on industries like construction to develop a skilled workforce.

The Anthony Albanese-led government’s task is straightforward: To deliver “1.2 million new, well-located homes” and to achieve this target, the authorities need to build 240,000 new homes each year, or 20,000 a month. However, the last time Australia got even close to building 240,000 new homes in a single year was 2017, when the country built 223,563 housing units.

As per property analyst Cameron Kusher, in 2017, the interest rate back was a pleasant 1.5%. In 2024, the same ratio stands at 4.5%. Even though new homes get built at a rapid pace, who will buy them in a high interest rate regime? Plus, construction companies, especially the mid-tier types that build medium-density apartment buildings, are shutting down their shops. By March 2024, according to ASIC, 1,913 construction companies had so far gone bust, three times as many as at the comparable point in 2021/22.

Banks aren’t financing these companies the way they used to. Some of these ventures also got involved in fixed-price projects during COVID, and now can’t afford to implement them. Also, due to the high interest rate regime, building materials have become about a third more expensive than they were before the pandemic. There is a significant shortage of tradies, partly due to a decrease in apprenticeships. In 2012, there were 376,800 apprenticeships, but by 2020, that number had fallen to just 134,800. Additionally, Australia’s tradie workforce is ageing and overworked.

Poorest Australians hit hardest

The 2023 Rental Affordability Snapshot by Anglicare surveyed 45,895 rental listings, only to find affordability crashing to record lows. The social advocacy organisation is now calling for more social housing to end the shortfall of 640,000 homes, apart from advocating for better protections for renters, including an end to no-cause evictions and limits on unfair rent increases, and tax reforms to make housing more affordable.

Although post-COVID factors like Aussies’ preference for more space, the return of international migrants, and rising interest rates, can be blamed for the above-mentioned distressing trend, for Rachel Ong ViforJ, ARC Future Fellow & Professor of Economics, Curtin University, the rental affordability crisis pre-dates COVID, as affordability has been steadily declining for decades, with successive governments failing to make shelter more affordable for low-to-moderate income Australians.

“At the lower end of the rental sector, the growth in the supply of social housing persistently lags behind demand, trending at under one-third the rate of population growth. This has forced growing numbers of low-income Australians to seek shelter in the private rental sector, where they face intense competition from higher-income renters. At the upper end, more and more aspiring home buyers are getting locked out of home ownership,” Ong ViforJ noted.

As per another study, more Aussie households with higher incomes are now renting out their spaces. Households earning $140,000 a year or more (in 2021 dollars) accounted for just 8% of private renters in 1996. By 2021, this tripled to 24%.

According to Ong ViforJ, this trend is crowding out lower-income households who are now facing a shortage of affordable homes to rent.

While current policies focus on supply, more work is needed including fixing labour shortages and providing greater stock diversity. However, the housing affordability challenge is not solely a supply problem. There is also a need to respond to the supercharged demand in the property market.

“An overheated market will undoubtedly place intense pressure on the rental sector because aspiring first home buyers are forced to rent for longer, as house prices soar at a rate unmatched by their wages. Yet, governments continue to resist calls for winding back the generous tax concessions enjoyed by multi-property owners,” Ong ViforJ commented.

The main help available to low-income private renters, the Commonwealth Rent Assistance scheme, has been poorly targeted with nearly one in five low-income renters who are in rental stress deemed ineligible, while another one in four receive it despite not being in rental stress.

Experts are pitching the theory of filtering: A market-based process by which the supply of new dwellings in more expensive segments creates an additional supply of dwellings for low-income households as high-income earners vacate their former dwellings.

Proponents of filtering argue building more housing anywhere, even in wealthier ends of the property market, will eventually improve affordability across the board because lower-priced housing will trickle down to the poorest households. However, the persistent affordability crisis faced by low-income households and the rise in homelessness are crucial signs of filtering not working well as a parameter to produce lower-cost housing.

As per Leith van Onselen, Chief Economist at the MB Fund and MB Super, Australia has one of the largest construction workforces in the world relative to its population. Citing independent economist Tarric Brooker, Onselen stated that Australia completes more homes per capita than almost anywhere in the developed world. However, when the population is constantly growing at such a large rate, “even a world-beating level of construction still can’t keep up.”

Australia’s structural housing shortage has more to do with demand, and excessive levels of population growth, than an inability to build housing. To prove his point, Onselen cited the massive rise in Australia’s net overseas migration (NOM) from the mid-2000s. In the 15 years to 2004, Australia’s NOM averaged 91,000 a year. But in the 15 years to 2019, Australia’s NOM averaged 220,500 a year, representing a 142% increase in annual NOM.

Even over the last four calendar years (2020–2023), Australia’s NOM has averaged 245,500 per year. Population growth across the major cities has been extreme, with Melbourne (1.7 million) and Sydney (1.35 million) experiencing the strongest growth in numbers terms and Brisbane (60%) and Perth (59%) recording the strongest growth in percentage terms.

According to Australian Bureau of Statistics (ABS) projections, Australia’s population will grow to 43.9 million people by 2071, representing an increase of around 16.5 million from the current population of 27.4 million. As per Onselen, this is the equivalent of adding another Sydney, Melbourne, Brisbane, Perth, Hobart, and Canberra to Australia’s current population in only 48 years.

“It would also require the construction of at least 7.5 million homes accounting for demolitions to accommodate the projected population surge. It is also worth pointing out that it took Australia 212 years to reach a population of 19 million people in 2000. Yet, the population is officially projected to grow by another 24.9 million people in only 71 years! Melbourne (9.5 million) and Sydney (8.4 million) are projected to have larger populations than Australia’s entire population in 1950,” he noted further, while concluding that the country will never be able to build enough homes as long as its population grows like “an out-of-control science experiment.”

The post Australia’s housing conundrum: Straining the system appeared first on International Finance.

Pandemic Aftermath: A Landscape Transformed

The commercial property market in the UK, particularly the office sector, took a significant hit during the pandemic. Office spaces saw a decline in demand as companies pivoted towards hybrid and remote working models.

The uncertainties triggered by rising inflation and borrowing costs further dampened investment prospects, creating an environment of hesitation and a steep drop in transaction volumes. Office vacancy rates in London soared, with many companies downsizing or deferring relocation plans.

Data from CoStar reveals that vacancy rates in the capital touched 10.1% in Q3 of 2024—the highest in more than two decades. Even more notably, the eastern Docklands area, including the prominent Canary Wharf, saw vacancy rates rise to nearly 17%. The need for alternative utilisation of these spaces is increasingly evident, as developers explore converting empty office buildings into hotels or residential properties.

However, these gloomy metrics do not paint the full picture. With major new developments underway and a substantial shift in investor preference towards high-quality office spaces, there is optimism that the market is on the brink of turning a corner.

Key Properties Testing Market Waters

Several high-profile properties in London are currently on sale, presenting a litmus test for overall market conditions. Nuveen, a global real estate investor, recently put its 21-storey “Can of Ham” building on the market for GBP 322 million, which is a significant markdown from its 2022 valuation of GBP 400 million. The “Can of Ham,” so-called due to its distinctive rounded design—represents a crucial test of market sentiment, given the price revision.

Similarly, Brookfield Asset Management has listed its Citypoint tower for GBP 500 million, a far cry from its GBP 670 million valuation and below the price tag from its 2016 sale. These properties’ valuations underscore a central issue in the post-pandemic market: forced corrections in valuation, where sellers must accept significantly reduced offers. The reduced prices reflect investors’ concerns about tenant occupancy and the potential for future rental growth amid economic uncertainty.

New Developments Cater To Shifting Preferences

Despite the challenges in older office assets, demand for new high-quality office buildings is on the rise. M&G’s new office towers at 40 Leadenhall are reportedly over 80% let, despite their recent listing on the market. This success highlights an underlying trend of “upgrading”—tenants are seeking out premium office spaces to match their evolving workforce needs.

Buildings like 40 Leadenhall are designed with a broad range of modern amenities, including wellness facilities like saunas, yoga rooms, hair salons, fitness suites, and even cinema rooms. The presence of such perks is becoming essential as companies seek to entice employees back to the workplace. As Martin Towns, deputy global head of M&G Real Estate, noted, “We had a conviction that tenants would want to upgrade their space.”

A major trend in the construction of these new properties is the emphasis on green credentials and sustainable features. A report by Turner & Townsend Alinea highlights that construction costs for prime office buildings in London have risen to over GBP 500 per square foot, compared to under GBP 400 per square foot before the pandemic. Half of this cost increase is attributed to the need for better amenities, while the rest is linked to improved sustainability standards—including energy efficiency and minimising carbon footprints.

Office Market Recovery Lags But Shows Promise

According to MSCI, the overall UK commercial property market saw transaction volumes rebound by 26% year-on-year in Q2 of 2024. However, this uptick is nuanced: office deal volumes were still down by 21% over the same period, lagging behind segments like logistics and residential properties.

The market has not seen a single office sale above GBP 100 million in the first half of this year, the first time this has happened since 1999. These numbers indicate that while investor appetite is returning, it remains uneven across different property types.

Nevertheless, overall market projections remain optimistic. Capital Economics forecasts that UK commercial prices will rise by 2% in 2024, a notable contrast to the continuing declines anticipated in the eurozone and the United States.

Moreover, United Kingdom commercial real estate is expected to outperform other Western markets over the next four years. These predictions are grounded in expectations of easing inflation, stabilising interest rates, and improving financing conditions—all of which would help support demand for property investments.

Investors Eye The UK As Opportunities Arise

One of the driving forces behind the market’s anticipated recovery is renewed interest from both domestic and international investors. Following years of subdued investment, there is an emerging belief that the UK presents attractive opportunities at a relative discount, especially compared to other European capitals such as Paris or Frankfurt.

James Seppala, head of real estate for Europe at Blackstone, mentioned that the market’s “mood music” had changed, with more investors returning after years on the sidelines. Fiona Voon, head of real estate capital markets UK at BNP Paribas, similarly noted that investors are being drawn to the UK due to the stability of its political environment, which is seen as an advantage compared to other regions. This interest is particularly evident from Middle Eastern, Asian, and Australian investors who are keen to make their mark while valuations are favourable.

Domestic investors like Schroders are also stepping up, with plans to deploy hundreds of millions of pounds into the UK commercial property market this year and the next. The firm’s global head of real estate, Nick Montgomery, emphasised that “from the position we’re in, it’s more of an opportunity than a risk,” highlighting the shifting investor perception of the UK’s office market.

Future Directions And Challenges

While the signs of revival are promising, the road ahead for the UK commercial property market remains challenging. The transformation of office usage is still underway, as remote and hybrid work arrangements appear to have lasting impacts. Many outdated and underutilised properties will likely need to be converted for alternative uses, such as residential housing, to avoid lingering vacancies.

Additionally, while new premium properties like 40 Leadenhall attract tenants, many older buildings outside core locations face bleak prospects. According to MSCI data, London’s overall office vacancy rate remains above 10%, reflecting a bifurcation between the demand for high-quality and lower-quality office spaces.

Financing constraints also present a significant hurdle. The cost of borrowing remains a challenge for many potential buyers, and higher refinancing costs may force some landlords to sell properties at discounted prices. However, the recent easing of inflation and expected stabilisation of interest rates may make financing slightly more attractive over the next year, which could provide a boost to deal volumes.

An Opportunity-Laden Recovery

The UK’s commercial property market is on the cusp of a potential recovery, but this journey will likely be complex and varied across property types and locations. Prime office buildings in central London, which offer upgraded amenities and sustainability features, are expected to lead the charge in this recovery. Meanwhile, older office properties that do not meet the evolving demands of tenants risk being left behind unless they are repurposed.

The market’s recovery is contingent on a combination of factors, including the stabilisation of financing conditions, effective management of surplus office space, and investor confidence in the broader economic environment. For now, international and domestic investors are increasingly optimistic, seeing value in the opportunities presented by a market that has experienced forced price corrections.

Their activity will be pivotal in shaping the trajectory of the UK commercial property market over the next few years, potentially marking the beginning of a broader revival for commercial real estate in the post-pandemic world.

The post IF Insights: UK commercial property market shows signs of post-pandemic revival appeared first on International Finance.

Dubai-based Realiste develops PropTech. As part of its Middle East North Africa growth in May 2022, it launched in the UAE and Saudi Arabia. The startup produces an artificial intelligence-powered real estate investment tool for New York, Abu Dhabi, Dubai, Riyadh, and London. The technology alerts asset owners when to buy or sell.

Dubai benefited from global geopolitical issues this year. This year, Russian entrepreneurs, investors, and top professionals sought new residences there. More than 16% of Russian enterprises and entrepreneurs moved to the UAE and Dubai in the first half of the year, according to Dsight.

The local real estate market benefited from Qatar’s 2022 FIFA World Cup. However, Dubai, a tourist magnet and financial centre, helped most outside Qatar.

Dubai will remain appealing to foreign purchasers seeking asset protection. Geopolitical upheaval and the energy crisis will improve its position. Alex Galtsev, CEO of Realiste stated that demand for the local property would rise in 2023.

Realiste analyzed data from December 2021 to December 2022. Dubai’s real estate market trends are examined, including places with the most significant growth, average property prices, and high- and low-priced neighborhoods. The report uses Realiste AI to predict Dubai’s property market in 2023.

Average prices in Dubai range from Dh425,000 in Wadi Al Safa 2 Part 1 to Dh12,042,618 in Al Safouh First Part 2. In addition, Reallste’s artificial intelligence ranked Trade Centre First and Al Wasl Part 2 as Dubai’s most costly neighborhoods.

In the first quarter, attractive beachfront districts (like Palm Jumeirah) had the highest property demand. As a result, low supply and high demand boosted prices in some areas.

Hadeeq Sheikh Mohammed Bin Rashid Part 2, popularly called Dubai Hills, multiplied. They drew families bored of living by the beach or canals and seeking parkland. As a result, Dubai Hills gained 53% and averaged Dh1,600,000 in price.

Most locations with the most growth in 2022 surpassed their price limit and will increase slowly in 2023. For example, Realiste AI analytics indicates that Palm Jumeirah’s average price would rise 5% in 2023.

Undervalued sectors that haven’t hit price restrictions will rise rapidly. For example, Jumeirah Village Triangle’s property market surged 62% in 2022, with average prices reaching Dh731,403. In 2023, house prices are predicted to rise 29%.

Dubai’s property market will rise next year. Realiste AI predicts local prices will increase by 10-15%, with certain places soaring by 46%.

The post Dubai’s real estate to expand 46% in 2023? appeared first on International Finance.

The CBRE stated that the UAE offers a complete lifestyle with excellent infrastructure to the property buyers.

According to Mortgage Finder, a tech-enabled mortgage consulting service powered by Property Finder said that roughly 82% of mortgages in the UAE were from first-time buyers intending to live in the property in 2021.

The UAE residents made up the majority of borrowers at 94%, while 90% of borrowers opted for fixed-rate mortgages.

The residential market in Dubai witnessed a record first quarter as the total volume of transactions reached 7,865 in March 2022, up 83% in 2021.

Total transaction volumes for the year ended March 2022 were 19,009, the highest total reported in any year’s first quarter. Off-plan sales surged by 94% in the first quarter of 2022, while secondary market sales increased by 76%.

According to another research report, Dubai real estate is projected to continue its golden run after Expo 2020 which ended in March 2022, as foreign investors return to the market to take advantage of the UAE’s investment potential.

Average property prices in Dubai increasing
The report noted that average property prices in Dubai increased by 11% in March 2022. During this time, average apartment prices climbed by 10%, while average villa prices increased by 20%.

The average apartment price in Dubai was $30 per square foot at the end of March 2022, while the average villa price was $344 per square foot.

Compared to the highs witnessed in late 2014, these rates per square foot for apartments and villas are 26.2% and 12.3% lower, respectively.

Downtown Dubai has the highest average sales rate per square foot in the apartment market, at $550 per square foot. In the villas segment, Palm Jumeirah had the highest average sales rate per square foot at $792.

Average rents increased
The average rent climbed by 13% in the year to March 2022, with average apartment and villa rents increasing by 11.7% and 22.5 percent, respectively.

The average apartment and villa rents in March 2022 were $21,780 and $64,917 per year. The Palm Jumeirah rental market had the highest average yearly apartment and villa rents, with average asking prices of $53,766.

Overseas investors are back
According to Zoom Property Insights, the Dubai property market attracted 52,415 investors in 2021 and recorded 72,207 new agreements worth a total of Dh148 billion in various UAE projects. It indicates a 100% increase in investment value, as well as increases of 65% and 73% in the number of investors and investments, respectively.

The Zoom Property Insights said, in 2021, foreign investors made 51,544 investments worth Dh99 billion, accounting for around 38,318 of the total investors. The Zoom Property Insight also said that this increasing momentum will continue throughout 2022.

The UAE is preparing for the International Property Show (IPS) 2022, which will attract more foreign investment. Starting from August 2022, it will welcome investors from Spain, Serbia, Montenegro, Austria, the United States, Ecuador, Canada, and Mexico.

According to Ata Shobeiry, CEO of Zoom Property, the infrastructure, lifestyle facilities, and visa reforms are some of the primary reasons supporting the return of investors to the Dubai property market.

Ata Shobeiry said that Dubai’s superb infrastructure, long-term visa options for foreign investors, and world-class facilities are just a few of the factors that draw in foreign investors. Sustainability, economic prosperity, market diversity, and good returns are just a few of the other primary reasons why investors return to Dubai real estate.

He also said that Expo 2020 plays a major role and the market will see a major boom in the coming months of 2022.

Mortgage financing plays key role
Mortgage Finder’s managing director, Mohamad Kaswani, stated that the company saw remarkable growth in 2021, with transactions exceeding the previous two years combined.

According to data from the Dubai Land Department, the mortgage business had a record-breaking year in 2021, with transaction values surpassing previous highs by 26% from 2017.

Mohamad Kaswani said that he is energized by seeing residents choosing to put down firm roots by purchasing their own homes in UAE. He said that the company had noticed the trend after following the lifting of COVID-19 lockdown restrictions back in mid-2020 and since then the trend has not slowed down.

He also said that the improved alignment between valuations and purchase prices makes the mortgage process far easier for buyers. Furthermore, it is also a sign of maturing market behavior as valuations moved in line with market changes, he added.

District 2020 holds the key
Ata Shobeiry said in addition to the return of overseas investors, the transition of Expo 2020 into District 2020 also stimulate the Dubai property market in 2022.

He also said that District 2020 will continue its legacy as a sustainable and human-centric future metropolis in the coming Expo. It will feature expansive business and retail spaces along with modern co-living, loft, or urban-style residential units.

Haider Tuaima, director and head of real estate research at ValuStrat said that they will reuse 80% of the present Expo 2020 site and will become one of five key urban centers under Dubai’s master urban plan 2040, which was revealed in early 2021.

District 2020, a future legacy of Expo 2020, will include more than 200,000 square meters of LEED-certified business and residential space, as well as 45,000 square meters of green space.

The location has a direct connection to the metro system, and three main motorways, and is 90 minutes from three international airports and one seaport, Tuaima said.

The demand has already been demonstrated from the signing of technology and innovation-focused anchor tenants such as Siemens, Terminus, DP World, and Siemens Energy.

Tuaima while citing its location and modern infrastructure said that on a strategic level there is no doubt that District 2020 will be a thriving hub for international business and act as a significant catalyst for the entire city.

According to a recent Ernst & Young report titled ‘Expo 2020 Dubai’s Economic Impact’, the event bought around Dhs122 billion to the UAE economy.

While the tourist, hotel, and food and beverage industries accounted for the majority of the revenue. Also, there has been a noteworthy increase in demand for leased flats as a result of an increase in visitors to Dubai.

In terms of future trends, Expo 2020 has opened a new focus for investors in areas such as Business Bay, Jumeirah Village Circle, Sports City, Barsha South, and areas close to the Expo site.

While hotel occupancy remains low, the development of Maktoum Airport is expected to result in a significant boost in tourism to these locations. There has been an influx of tourists who have been working from home, and this is projected to continue.

Upward trend to continue
According to Husni Al Bayari, chairman and founder of D&B Properties, the Dubai real estate market will continue to rise in 2022.

Al Bayari said in the new quarters of 2022, the UAE remains bullish on the off-plan and secondary markets. Prime locations continue to be in great demand, with many transactions taking place in the off-plan and secondary markets, he added.

He also said that with Expo 2020 Dubai, outstanding resident visa alternatives are becoming more accessible. UAE anticipates significant growth in sustainable, innovative projects in Dubai, attracting even more end-users, investors, and a new generation.

New projects to boost the market
Meanwhile, according to data issued by the Dubai Land Department (DLD), the real estate sector in Dubai will be back in the spotlight and it is displaying strong signals of long-term growth.

According to a survey of property analysts Dubai house prices are expected to grow 3% in 2022 and 4% in 2023, up from 2% and 3% three months ago.

According to the poll, the Dubai residential property market will remain stable for the next few years, with a little increase in prices. On the one hand, this shows affordability, while on the other, it indicates long-term growth.

Dubai now has a favorable climate for investment in properties, which gets further endorsed by leading real estate players who are planning new projects. Danube Group, for instance, is one among them.

The off-plan housing segment performing well in Dubai
In Dubai, off-plan property sales increased significantly in 2022. In February 2022, off-plan properties recorded Dh 4.95 billion, or USD 1.3 billion, across 2,599 sales deals. This is the largest sales value for off-plan property sales in Dubai since December 2013, and it represents an eight-year high. It is also the most off-plan trade in a single month since November 2019.

According to the survey, Arabian Ranches 3 and Villanova had the most off-plan villa and townhouse sales. In Arabian Ranches 3, 187 apartments were sold, while in Villanova, 157 were sold. Tilal al Ghaf, with 79 units, Dubai South, with 58 units, and Mohammed bin Rashid City, with 16 units, were among the other locations of interest.

According to demand for off-plan property, in August, the top regions for villas and townhouses in Dubai were Dubai Hills Estate, Arabian Ranches, Palm Jumeriah, Damac Hills 2, and Mohammed bin Rashid City.

Off-plan apartments were in high demand at Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay, and Jumeirah Village Circle.

In addition, the average transaction price for off-plan property in Dubai increased by 53% year over year, rising from around Dh1.2 million in February 2021 to Dh1.9 million in February 2022.

In March 2021, the median price for off-plan apartment sales was Dh1.1 million, up 48% from Dh745,500 the previous year. For the month of January this year, the median price for off-plan villas and townhouses was over Dh1.8 million, up 125 from Dh1.6 million last year.

Meanwhile, Alpha Dhabi Holding (ADH), a UAE-based conglomerate, purchased an additional 17% stake in Abu Dhabi’s largest property developer Aldar Properties, taking its stake to 29.8%. In this latest investment, Alpha Dhabi Holding completed the acquisition of Sublime 2, Sogno 2, and Sogno 3, which together own 17% of Aldar Properties.

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To begin, house prices in the UK have been stable and buoyant for the most part. With a no-deal Brexit on the cards, experts anticipate that the UK leaving the EU without a trade deal could impact house prices in London—but not the property market at large. For what it’s worth, the UK property market is experiencing a boom driven by the government’s decision to impose a stamp duty holiday until March 31, 2021. 

London Lettings and estate agent Benham and Reeves has published a research report which found that cash buyers are securing the biggest property price discounts in the prime London market. This finding is compared to those funding their home purchase with a mortgage. 

Why London property market is still attractive 

Across London’s prime postcodes, cash buyers are easily saving themselves  shy of £16,000 on average. Again, this is quite profitable compared to those buyers who are funding their home purchases with a mortgage. Recently, the biggest cash discount seen across the prime market was in the W1 postcode in Mayfair. According to the research, these cash buyers are paying an average of £2.320 for property in the postcode, which points to £81,772 less less than their mortgage funded counterparts. 

Director of Benham and Reeves Marc von Grundherr, as part of the research said, “Cash is always king when it comes to negotiating a better price in the UK property market and this is no different at the very top end. Regardless of the value of a property, a cash buyer often means a smoother, quicker and more stable selling process as there is no chain beyond them to complicate the transaction. This can be preferable for many sellers but it does often mean adjusting their price expectations for the pleasure. As a result, cash buyers will often pay less and in the prime market, these discounts can be sizable although still relative to the overall price of a property.”

For now, the London property market is still an attractive market for property buyers despite all crises. A weaker pound and added benefit of a stamp duty discount is in fact allowing foreign cash buyers to save more money and secure a good value for their investment.

Grundherr said “We see many foreign buyers, in particular, benefit from a cash funded purchase as they generally tend to have a strong financial position and are entering the market fresh with no previous purchase slowing them up. The London market currently provides a very attractive proposition, with a weaker pound and the additional benefit of a stamp duty discount meaning foreign cash buyers are saving themselves quite a considerable sum and are securing extremely good value for money.” 

UK cities noted for chain-free sale 

In another research published by Yes Hombuyers, some of the UK cities are noted for their highest levels of chain-free property stock, especially for homebuyers seeking to avoid current market backlogs. By the numbers, Cambridge appears to be the chain-free property hotspot in the UK. Currently, 46 percent of all homes listed in London create an opportunity for a chain-free sale., leading to easy transactions and swift sale process. That is followed by Belfast, which is again home to the second highest number of homes with chain-free sale. It is found that 44 percent of properties listed for sale have not had a dreaded chain. 

Other cities such as Sheffield, Manchester and Liverpool share the reputation of being the third best city for a chain-free sale. Two weeks ago, it was found that they collectively owned 42 percent of the current property stock listed. In this context, Matthew Cooper, Founder and Managing Director of Yes Homebuyers, as part of the research said “Being stuck in a chain can be an incredibly stressful process when selling or buying a property and waiting for the stars to align can drag on for months on end, before the whole thing comes crashing down and your back to square one.” Nonetheless, the beginning of 2021 will lead to the realisation of what might be the actual impact of Brexit on the UK property market, and whether the prices and chain-free sale will dramatically change.

The post The true cost of Brexit on the property market—not felt? appeared first on International Finance.

A significant improvement in credit volumes in the Kingdom, loan growth recovery in Turkey and strong volume in Egypt are contributing factors to UAE banks’ loan growth this year.

Loans might increase by 7 percent in the Kingdom compared to 6 percent last year. Its retail mortgages will continue to fuel credit on the back of 31 percent year-on-year expansion in the third quarter of 2019.

Dubai’s Expo 2020 comprising more than 190 countries will benefit lending in the UAE.  JPMorgan Chase analyst Naresh Bilandani, told Bloomberg in an email, “Expo 2020 is a key catalyst — which can offer a boost to both corporate and consumer spending — and provide impetus to tourism.”

Also, the UAE banks’ regional expansion will help to increase their revenue, especially with a government-led mortgages programme in the Kingdom driving home loans, the media report said.

According to Bloomberg compilation, the UAE’s economic growth forecast is expected to increase to 2.5 percent from 1.6 percent last year.

Last year non-performing loans in the UAE climbed to their highest level in more than five years, despite slowdown in property prices. The slowdown is mainly attributed to the oversupply in the UAE’s property market. Mortgage Finder noted that there has been a 59 percent increase in property enquiries between 2018 and 2019.

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In addition, the mortgage market has improved significantly and higher loan to value mortgages are once again available, although not at 100% loan to value as they were before the credit crunch.

There has been criticism over the government’s promise of a £2bn injection to help with funding to build social housing, as Downing Street aides have stated that this will only fund 5,000 of the 60,000 extra new houses needed to be built each year. Funding is certainly not the major issue. There are other problems.

Loss of workers

When the credit crunch first hit in late 2007, 100% and high loan-to-value mortgages literally disappeared overnight. It happened so fast that even mortgage offers already in place were not honoured as lenders’ funds disappeared.

The difficulty obtaining a mortgage made the desire of buying a house nearly impossible for a lot of people. Less people to buy houses impacted builders and property developers very quickly and left them with a lack of work. The demand for tradespeople such as carpenters, plumbers, electricians, bricklayers, etc. was decimated. It is important to realise that this was not a gradual decline over a number of years; it was a massive decline that happened over a matter of months.

The industry shrunk quickly and many people lost their jobs. As so many people skilled in the same trades lost their jobs and were unable to find more work doing the same thing, they were forced to find work outside the building industry and re-train in different sectors.

Over the last 10 years, less people have entered the building industry due to lack of job prospects. Now the demand is back and prices are high again; more people will be needed in order to build more houses. Unemployment figures across the country are low. So not many workers will be looking for jobs and to add to this problem, many European workers who filled lower paid roles have returned to their home countries due to the stronger Euro and concerns about Brexit.

To get more workers, the roles offered will have to be more attractive, which will push the cost of building the new houses up further.

Uncertainty of Brexit

When demand for new houses disappeared and jobs were lost, the production of building materials slowed, and for some manufactures, ceased altogether. To build more houses, we will need more materials – but the factories have not been waiting on standby for all of this time. To increase the supply of materials, manufactures will have to commit to more production, meaning costs of finding new premises and employing workers.

Many business owners and property developers are reluctant to commit to new ventures that could be risky at the moment due to the uncertainty for the future, mainly caused by Brexit. Until the country faces a more stable future, many individuals responsible for making decisions needed in order for us to move forwards and build more houses will remain cautious and are unlikely to spend huge sums of money opening factories or training new workers as they just do not know if it will be profitable, or indeed if it could actually prove very costly.

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