DLD issues its annual report: Real Estate Sector Performance 2020

Dubai Land Department (DLD) released its annual report titled ‘Real Estate Sector Performance 2020,’ on the side-lines of the International Property Show and Invest in Dubai Real Estate. Through this report, DLD provides a comprehensive tool for customers in the sector, allowing them to familiarise themselves with the most important results achieved, affirming DLD’s efforts to achieve its vision to position Dubai as the world's premier real estate destination and a byword for innovation, trust, and happiness.

The report aims to provide a comprehensive picture of Dubai’s real estate sector’s performance by analysing all aspects of the sector’s performance and the various economic and operational indicators that affect its performance to determine its future trends. The report consists of four main chapters. The first chapter covering the analysis of Dubai’s macroeconomic indicators, and the contribution of the real estate sector to the emirate’s economic growth. The second chapter covers an analysis of the operational performance indicators of the sector, the third chapter highlights some of the important issues that affect the performance of the sector, while the fourth chapter provides an analysis of the expected future trends in the sector’s performance.

HE Sultan Butti bin Mejren, Director General of DLD, described the report as a comprehensive monitoring tool that strengthens decisions and enriches analyses, affirming DLD’s approach based on the importance of communicating with all customers and partners from different parties.

Bin Mejren commented: “We regularly develop and introduce several tools, highlighting the highest levels of transparency in disclosing the results of the performance of Dubai’s real estate market and its achievements, which represent annual key outputs. With the report, customers can learn about the latest developments in the real estate market and benefit from the information and data included to make informed investment decisions related to buying, selling, investing and entering into partnerships. Despite the consequences of the outbreak of COVID-19 and its repercussions on our real estate sector and all other sectors, we have been keen on issuing the report on time to emphasise the strategy of regular communication with all parties interested in the sector's performance, helping them form a comprehensive picture and identify our efforts and initiatives to address any gaps that may appear to ensure that the market continues its usual activity.”

Majida Ali Rashid, CEO of the Real Estate Promotion and Investment Management sector at DLD, said: “Through this report, we target all customers and partners, including developers, investors, sellers and buyers, media institutions, and local and international research agencies, through its four chapters that focus on monitoring the performance of our real estate sector in 2020. Our teams have used an ample amount of data for the various types of recorded behaviours, paving the way for an analysis of the operational performance indicators of the sector and preparing the report based on a comprehensive editorial approach. To review the economic indicators of the emirate, it was necessary to discuss an important issue affecting its performance, namely ‘The impact of COVID-19 on the performance of the real estate sector,’ which discussed potential and expected effects of the real estate sector’s performance in light of the restrictions imposed by the spread of COVID-19."

Real estate is an important tributary

Dubai’s real estate sector represents one of the main economic sectors in economic growth, and it actively contributes to the growth of its economy. Over the past years, the emirate has achieved record rates of economic growth driven by the economic initiatives and packages that the Dubai Government is undertaking to raise economic growth and stimulate various economic sectors. The value of Dubai’s GDP reached AED 407 billion in 2019 compared to AED 389 billion in 2018, with a growth rate of 2.2%.

But the emergence of COVID-19 in December 2019, and its subsequent outbreak around the world, led to a decline in global economic growth rates, prompting all international institutions to reduce their global growth forecasts for 2020. To avoid the consequences of the pandemic, Dubai provided a package of measures and economic incentives to ensure business continuity and help the various economic sectors overcome the pandemic, most importantly the launch of an economic stimulus package to support companies and the business sector in Dubai to boost financial liquidity, among others.

The contribution of the real estate sector to Dubai’s GDP reached 7.2% in 2019, and the sector achieved an added value of more than AED 29.4 billion, with a growth rate of 3.3% compared to 2018. Real estate transactions achieved remarkable growth in 2019 in terms of the number and value of real estate transactions, and this improvement continued during the first months of 2020. The growth rate achieved in the number of real estate transactions reached 8% in 2019 with over 57,000 real estate transactions, compared to over 52,000 real estate transactions in 2018.

Transactions and investments

The value of real estate transactions reached approximately AED 226 billion in 2019, compared to AED 221 billion in 2018, with a growth rate of 2.1%. This improvement in the value of real estate transactions is due to the remarkable growth in the value of both sales and mortgages, where the value of sales reached AED 81 billion in 2019, compared to AED 77 billion in 2018, with a growth rate of approximately 5%, and the value of real estate mortgages reached AED 125 billion in 2019 compared to AED 120 billion in 2018, with a growth rate of approximately 4%.

In addition, the number of real estate investments in 2019 exceeded 47,000 investments, with a growth rate of 18% compared to 2018, which achieved 40,000 real estate investments, and the number of real estate investors also witnessed a remarkable growth during 2019 compared to previous years.

The number of real estate investors in 2019 exceeded 34,000 real estate investors, compared to 2018 with 29,846 investors, with a growth rate of 14%.

The sector’s attractiveness

Dubai Marina ranked first in terms of real estate investment quantity in 2019 with 3,920 investments, followed by Business Bay with 3,508 investments, Al Khairan First with 3,142 investments, Hadaeq Sheikh Mohammed Bin Rashid with 2,833 investments, and Burj Khalifa with 2,721 investments.

Investors from India topped the list of investors in terms of nationality with 5,426 investors, followed by the UAE with 5,172 investors, and the KSA, China, and the UK with 2,198, 2,096 and 2,088 real estate investors respectively, followed by Pakistan, Egypt, Jordan, the USA, and Canada.

In terms of real estate projects, a total of 1,894 projects were registered with DLD in freehold areas, 814 of which were completed and 314 under construction. In 2019, 70 real estate projects were registered with DLD, while 14 were registered in H1 2020. Of the projects registered in 2019, 69% were buildings, 24% were villa complexes, and 7% were villas.

As for the completed projects according to the year of project completion, 78 projects registered with DLD were completed in 2019 in freehold areas compared to 63 projects in 2018.

In addition, 314 projects registered with DLD are still under construction up until H1 2020. According to the date of project registration, 53 projects were registered in 2019, compared to 61 in 2018, 75 in 2017, and 45 in 2016.

As for Ejari contracts, 469,310 effective Ejari contracts were registered in 2019 according to the date of contract registration, compared to 448,564 Ejari contracts in 2018, with a growth of 5%.

Contribution of sub-sectors

An analysis of the performance of subsectors in the real estate sector showed that over 17,000 housing units were added to the real estate sector in 2019 varying between units, villas, complexes, buildings and residential lands with a total area of approximately 4 million square meters, compared to 10,996 residential properties in 2018 from the completed projects according to the end date of the project with a total area of approximately one million square meters.

2019 hit a record-high in terms of number and area of residential properties that have been added to the real estate sector, which is expected as a result of Dubai’s preparations to cover the expected increase in demand during Expo 2020 before it was postponed to 2021 due to the unforeseen circumstances imposed by COVID-19.

2019 also witnessed the addition of 871 new commercial establishments to the real estate market with a total area of 243,529 square meters, which is higher than the past few years, that witnessed an average addition of 250 shops annually. 2018 witnessed the addition of 238 commercial establishments according to the date of completion of the project with a total area of 39,262 square meters.

As for the hotel sector, there was a total of 544 hotels in Dubai in 2019 compared to 519 hotels in 2018, with a growth rate of approximately 5% according to the data of the Dubai Statistics Center. This growth was also reflected in the number of hotel rooms in 2019, with approximately 100,744 hotel rooms, compared to 91,085 hotel rooms in 2018, with a growth rate of approximately 11%.

The pandemic and its impact on the sector

The economic impact of COVID-19 will extend to the real estate sector in most countries of the world, but thanks to the proactive measures taken by the wise government, digital transformation and technological progress to provide all government and private services, they have greatly reduced the severity of the expected impact of the pandemic on Dubai’s real estate sector. The government contributed to the promotion and support of various economic activities in Dubai, greatly assisting in the speedy recovery and resumption of normal economic activity. In addition, a number of measures were taken and packages of initiatives were launched to limit the effects of the outbreak COVID-19.

To download the report, please visit the below link: