Master of Business Administration(MBA)
Real Estate Business in United Arab Emirates
19th December, 2011
Table of Contents
HISTORY OF UAE REAL ESTATE BUSINESS3
NATURE OF REAL ESTATE MARKET4
SUPPLY AND DEMAND MODEL5
ELASTICITY OF UAE REAL ESTATE MARKET7
REAL ESTATE BUSINESS – IMPACT ON UAE ECONOMY8
UAE REAL ESTATE BUSINESS – CLASSIFICATIONS9
Residential real estate market9
UAE REAL ESTATE LAWS12
CHALLENGES IN UAE REAL ESTATE SECTOR13
SWOT ANALYSIS OF UAE REAL ESTATE SECTOR14
FUTURE GROWTH – INFERENCES AND CRITICAL CATALYSTS14
United Arab Emirates is considered as the most active property market among GCC countries. Real estate and business service sector contribute a considerable share for the growth of the nation. The economic boom during the years 2003 – 2007 increases the demand for real estate properties and there were shortage in residential and commercial segments. Emirates like Dubai have found an important place in world tourism map, the conditions in UAE also attracts foreign investors and job seekers. So, the available real estate space for residential and commercial purposes was not enough to fulfill the present requirement. Real estate markets in emirates like Ajman, Fujairah, and Ras Al Khaimah are not exploited well; they provide new avenues for investors.
Completion of some major projects in Dubai and Abu Dhabi in coming years expected to be able meet the requirements. In some real estate sectors like hotel market, experts predicts oversupply situation in future. Global financial crisis in the years 2008 -2009 badly influenced the real estate sector also. Due to uncertainty in markets, many expatriates return to home country and new investors in fear to make large investments. Expected huge supply along with reduce in demand during crisis time, value of real estate properties went down especially in Dubai. UAE government projects like ‘Abu Dhabi vision 2030’ provides enough importance for supplying residential properties. UAE economy is now recovering from recession and new opportunities in different sectors will enhance the growth of real estate sector in coming years. So, this analysis is meaningful to measure the current situation in UAE real estate market and to forecast to the future.
‘Real Estate’ is a broad term which represents a piece of land including the air above ground below and any building or structure on it. This can also include the business and residential properties which can be sold by the individual who own the property or a relater. Real estate refers to residential new homes and existing ones, commercial shopping centers and offices, industrial manufacturing buildings and properties, undeveloped lands and farms etc. Real estate investments are largely influenced by the condition of the immediate area where the property is located. The values affected by local factors such as availability of jobs, crime rates, taxes, presence of educational institutions and so on. In different countries, the broad nature of the term ‘real estate’ may vary but key ideas behind is almost same. Generally speaking, real estate is the property consisting of land and the buildings on it along with its natural resources. Real estate business represents the profession of buying, selling, renting or leasing of lands, buildings, houses etc. This business area includes the activities for providing goods and services involving financial, commercial and industrial aspects. Major players in this business are land owners, developers, builders, real estate agents, tenants, buyers and so on. This is an important business area where huge amount of money is involved and so, in depth knowledge is helpful. Real estate business is...