Video: “We have three projects lined up equalling Dhs1bn worth of inventory.”

How is the real estate market currently performing compared to previous years?

I believe every time any market slows down it gains strength and intelligence. I am sure all of us who have seen the Dubai real estate industry over the last two decades would agree that with every passing year the market has matured in every aspect. Today we have excellent infrastructure, strong regulatory control and, most importantly, transparency.

The maturity of the industry has brought forward excellent new dynamics and opportunities. To sum it up, it’s a consumer’s market ready for long term growth. I personally believe that the Dubai real estate industry is one of the strongest, not just regionally but globally.

What are the big changes you have noticed in the GCC real estate market since 2014?

Dubai sets the benchmark when it comes to the regional real estate market, whether you look at its regulatory system or industry performance. There have been many initiatives which shall drive future growth; however, I feel there are two key shifts which will benefit the industry in the long run. The increased focus towards affordable housing and immigration reforms are bound to create unprecedented gains in years to come. While the former will ensure that real consumers participate, the latter will keep feeding the market with fresh population and consistent demand. 

What are the key trends you have noticed in 2019’s real estate market?

Since a large portion of real estate offerings are now focusing on end users, we see increased efforts toward delivering community living. There is greater competition between developers to create consumer-friendly product at attractive price points with convenient payment options. The first-time buyers will continue to benefit from such offerings. We also need to keep in mind that with the maturity of the market, every square feet of space will continue to appreciate in cost, hence the key is to deliver more space in less square feet.

 I believe every developer needs to start remodeling their business from a high margins to IRR model in order to sustain in the long term. The competition will continue to offer consumers a better choice of living and investment. As a developer, we will need to rely on innovation to be able to impress the consumer.

How has the appetite for investment changed in recent years?

As the real estate sector shifts towards the mid-market and affordable housing, the investment pattern is also changing. We see more and more expats investing in Dubai’s realty and shifting from their rented property to their own homes. This shift essentially means the investment funds which otherwise would have travelled to the native country of the expat population is being retained in the UAE. This will not only continue to drive the growth of the real estate industry, but also inspire investment in other sectors too. I believe there is an excellent appetite in the market, which we can capitalise on by offering consumer-friendly developments.

What is your opinion on the different initiatives by the Saudi government to support the real estate market?

We need to understand that the mid income segment forms the backbone of any economy. All the initiatives are in line with greater focus on this section of the population, whether expat or national. Saudi Arabia will need to deliver a Dubai-like regulatory platform and it will be unfair to expect any overnight miracles.  

Having met the Ministry of Housing a couple of times, I see some amazing reforms being put in place in the right direction. We need to be patient and give it time for participation to begin. To begin with, a few necessary provisions will have to be served, including infrastructure development, assurance on timely utility connections, and most importantly flexible platforms to attract strong developers. Public, private partnership can further incentivise the affordable housing segment, leading to faster delivery of momentum for the industry. 

And what about the initiatives by the UAE government, such as new visa rules, stimulus packages, and so on?

The Government of the UAE has always been the trendsetter in immigration and trade liberalisation. The series of reforms that have been announced, no other country has ever done it in this manner and it will take UAE into a different league as a preferred destination for trade and living. I call them futuristic and proactive measures to create unmatched momentum for future growth. The neighboring countries are following in these footsteps, but what gives UAE the unique advantage is the existence of world class infrastructure, while other countries are still planning to develop in this regard.

The new immigration law has given the much-awaited catalyst to retain the existing expat population while also attracting a new population with clarity on permanent residency. At the same time, there have been tremendous efforts to bring down several government fees to relax the cost of operating business and cost of living in UAE.

Despite already having one of the best infrastructures, the UAE government has given it a fresh boost which shall further enhance the quality. Each initiative is equally important and combined together, they will have a lasting impact on the market. We are all a witness to the fact that UAE has not just improved but excelled year on year, and the visionary leaders have ensured the country remains the regional leader in every aspect.

What type of builds are currently being prioritised in terms of new real estate construction in the GCC?

Since the demand and focus is more towards affordable homes, typically low-rise sustainable developments will remain high in demand. Properties with lower maintenance expenses are also high in demand, as the mid income segment is extremely cost-conscious. As I have always said, there needs to remain a clear distinction between cheap and affordable. This is a very sensitive market segment and the challenge is to win the customer confidence and their investment. From my experience, value engineering, economies of scale, efficient design and material selection become key ingredients to deliver the right product. Along with these, a focus on timely delivery and excellent customer service are a must.

Is sustainability important to buyers? Is this something construction companies are priortising?

As I mentioned, the mid income segment is extremely cost conscious, and sp sustainability becomes a key element in the scheme of things. Other than that, I think every developer must also carry the moral responsibility to deliver eco-friendly developments that consume less energy. There is no doubt that sustainability, at many times, conflicts with affordability due to high acquisition cost; it’s about achieving the best equilibrium possible. There are certain elements like sensor operated LED lighting, which consumes less electricity and only when required must be incorporated in the design.

What opportunities are being presented to consumers in the current market, and what challenges are they faced with?

To put it simply, developers and their developments have become more consumer-sensitive. If you break it down, some of the key features are efficient design, attractive price, convenient payment terms, world class amenities, energy-efficient properties, and more. The consumer in the affordable home segment demands a convenient community living at attractive price point to be delivered on time.

The consumer has plenty of options to choose from, but once decided, I think one of the challenges is limited mortgage facilities with extremely tough credit requirements. To expect the home buyer to self-fund the property purchase is also in conflict with the affordable home segment, as they would have limited financial means. I think the industry requires bespoke and consumer-friendly regulations to be put in place precisely for first time affordable home buyers. One of the key advantages of the GCC is that there is no income tax so there cannot be any subsidies for this segment, but surely much more can be done to facilitate this market segment. Such efforts will only create organic and long-term growth for the overall industry.

Finally, what advice would you give to people looking to buy property in the GCC?

Invest wisely – think beyond the price. It’s your hard earned money so do proper due diligence. You must invest with a reliable developer who has a track record of delivering quality construction and reasonably on time. Do not compromise on the location, design and amenities, as it will help appreciate the value of your asset.  

The government has laid down stunning laws, infrastructure and audit checks to help the investors, so only invest in registered projects from licensed developers. You work hard to earn the money, so invest wisely.