60% of developers implement projects at affordable prices

Hossam Abdulnabi (Dubai)

Large real estate developers in the United Arab Emirates have begun to focus on real estate projects that offer affordable housing with the goal of accommodating up to 385,000 expatriates, said Ryan Fansa, said in an interview with Al Ittihad that the UAE government has promoted affordable housing plans for locals and expats. According to the UAE Home Finance report, about 60 percent of Dubai's top real estate developers are now involved in affordable real estate and have launched projects ranging from AED 400,000 to AED 700,000, despite declining revenues on the UAE housing market and the decline in transaction values ​​from previous years, the UAE real estate sector is maturing and expected to grow in the long run through better regulation, strong macroeconomic fundamentals and better infrastructure. " Government efforts to diversify the economy, stabilize oil prices, increase private investment and accelerate economic development have contributed to the recovery of the real estate market in the UAE and the Gulf region in general. "These factors , combined with the increase in per capita income, led to increased demand for housing and will also reflect the stability of the real estate sector across the GCC. Addressing Al-Ittihad, Fansa praised the efforts by the governments of Abu Dhabi and Dubai to reduce oil dependency, improve the economy, make favorable political decisions and reflect on the real estate sector in the UAE. % Of GDP in 2016, with an individual contribution of 6% and 9%, respectively. (FDI) and its positive impact on real estate growth Foreign direct investment in the UAE doubled from AED 55.3 billion in 2010 to AED 103.1 billion in 2015, with foreign portfolio investment ( REIT), which is still recovering from the economic downturn in 2009, reaching 7.7 billion dirhams in 2015.

The Gulf region has now become a favorite for global investors, with its real estate sector becoming an important measure of Economic growth in the region, That the tourism sector of the region aims to accelerate the acceleration of the young man market In the GCC countries, especially the United Arab Emirates.

On the impact of the application of VAT on the real estate sector, Fansa believes that this approach is part of economic diversification and sustainable growth: the value added tax can reach 12 billion dirhams the first year and 20 billion the second year.

and stresses that the application of VAT will increase transparency in the real estate sector despite the temporary impact at the beginning of the application on the real estate market, and that everyone will realize the l & # 39; real impact after the introduction of the tax. On the purchasing power of domestic investors and on the investment decisions of international investors. "It is also expected that the introduction of this tax will have implications for the real estate sector, particularly with leases and purchases of goods, considered as a value-added tax (VAT), likely to increase the VAT rents or acquisition costs, and the price of commercial real estate will increase by 2-5%. "