Buyer behaviour and appetite for residential real estate in the UAE and Saudi Arabia is looking optimistic, according to Alexander Luke Davies and Giles Hannah.
Davies, CCO at Dubai Holding Real Estate, and Hannah, Residential Executive Director at The Red Sea Development Company (TRSDC), were speaking at the Cityscape GCC Summit 2021.
They outlined a number of local factors leading to the current uptick in residential real estate in the UAE and Saudi Arabia.
RESIDENTIAL REAL ESTATE IN THE UAE
The residential sector in the UAE has been seeing “accelerated growth,” with transactions amounting to USD 88 billion as of the end of August, Davies said.
The market is performing better than predicted, while home ownership through mortgage-backed transactions are seeing increasing interest, Davies added. New visa options are enhancing the attractiveness of the country from a residential standpoint, he said.
Further, with the shift to home ownership, buyers are also looking at bigger spaces, luxury homes, community spaces and properties with facilities, he also said.
However, with the economy picking up, behaviour is once again shifting, with wider spaces in areas that may be away from the city centre now being weighed against daily commute considerations.
Meanwhile, disruptions in the supply chain concerning labour and recruitment at all stages of construction, as well as availability of construction materials, is a challenge for residential real estate in the UAE, Davies said. It has impacted some deliveries, he noted.
RESIDENTIAL REAL ESTATE IN SAUDI ARABIA
In Saudi Arabia, major new developments are on the way in the background of low supply of prime and super prime residential units, Hannah said. The market is leaning towards state-of the art technology, sustainability considerations and contemporary design, he added.
Further, with 60% of the population under 30 years old, financial initiatives are underway to incentives purchasing vs renting.
According to a TRSDC study on purchase decisions, 65% of people want proximity to healthcare, and 45% are willing to pay more for branded residences.
Meanwhile, Saudi Arabia’s moves to open up tourism in the country is yielding results. Hannah noted that tourism is expected to grow 70-80% over the next five to seven years.
“We’re seeing phenomenal interest from the international market, both for purchasers interested in owning a second home [or] a luxury residence. We’re also seeing some of the world’s leading hotel groups looking to invest here for the first time to really grow that hotel portfolio as tourism grows,” Hannah said.
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