A previous article talked about the 2016 real estate trends in the west. This time, the 2016 top trends in the property market in the middle east will be tackled.
According to Dubai Chronicle, JLL has just released "2016 Top Trends for UAE Real Estate." It is the 9th annual report from the world's leading real estate investment firm that assesses and predicts what the company is expecting from the UAE real estate market.
Speaking of the trends in general, JLL CEO Alan Robertson things that in 2016 the UAE real estate will see more challenging conditions as the result of declining oil prices and pressures to the government budgets. On the brighter side, Robertson says that the UAE real estate market is better equipped to face these challenges.
Moreover, according to the Dubai Chronicle, to cope with the oil slump, the government has already begun implementing strategies to reduce dependence on revenue from oil such as cuts on subsidies, reduce spending and proposing the implementation of Goods and Services Tax (GST). Robertson noted that despite the challenging conditions that the UAE economy and the real estate market are expecting to face, they can also expect to see growth at around 2.7% to the overall economy.
Therefore JLL says that the following trends are expected to prevail in UAE's real estate market in 2016. First is tighter liquidity. According to JLL, banks will be impose tighter regulations on lending that would urge developers to look for other means to come up with funds including joint ventures, refinancing, public private partnerships and co-investment vehicles.
Second, the world will see reduced outflow of capital from the UAE, which means that UAE will cut back on investments in real estate in other countries around the world. Sovereign investors are expected to change investment strategy and result to more selling activities. And since developers will find fund a challenge to obtain, 2016 can expect to see project delays. However on the bright side, this can help reduce the risk of oversupply. This leads to the fourth trend. In 2016, instead of building new building, the focus will shift towards adding value to existing buildings. Moreover, the demand for function buildings will also increase in this year.
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