As the countdown for Expo 2020 Dubai begins, the real estate sector is getting ready to make the most of this opportunity. The city has emerged as the most attractive destination for investment especially in the real-estate sector in the last decade due to the higher rate of returns and zero tax on investment — a combination that does not exist in any other part of the world. Starting from Friday, January 22, 2021 UAE residents and tourists are allowed to visit the Expo 2020 Dubai’s ‘Terra — The Sustainability Pavilion’ for Dh25 per ticket. The Pavilion’ will focus on the most trending topics today such as – climate change, reducing the carbon footprints, environmental impact, solar energy, exploring other sources of energy, finding out new and innovative irrigation techniques, including a greywater recycling system to reduce water use in the landscape by 75%, and working towards providing real-life solutions to help preserve the earth for future generations
There are a lot of expectations of the real estate industry from the EXPO 2020 due to a list of favorable policy reforms and schemes launched by the UAE government such as: the Golden card visa, investor visa, 100% foreign ownership for enterprises, easy payment plans, long-term residency options for professionals, and the flexibility offered by financial institutions in debt repayment, and foreign retirees scheme.
Furthermore, the success of Expo 2020 will also get a boost from the recent venture of ICD and Dubai South to launch the ‘Dubai Global Connect (DGC)‘ initiative which is launched to connect global wholesale buyers and sellers. DGC is a wholesale market platform that links buyers and sellers globally. The initiative will have a favorable impact on the competitiveness of the real estate market, infrastructure, economy, trade flow, which will spur the sales of the real-estate sector. These schemes will boost investor confidence and foster more investment into the UAE real estate market.
Forecast & Predictions:
The cost of constructing the expo site and related infrastructure is estimated to be US$6.9 billion. The Expo is predicted to attract significant investments to the UAE economy of Dubai. Here are some of the predictions on the impact of Expo 2020 on UAEs economy.
- Ernst & Young (EY) report – 2019 predicts that the Expo 2020 Dubai will contribute AED122.6 billion of gross value added (GVA) to the UAE’s economy till 2031. The grand event is also predicted to support up to 905,200 full-time equivalent (FTE) job-years in the UAE until 2031, which is equal to approximately 49,700 FTE jobs per annum.
- The EY report also expects the Small and medium-sized enterprises (SMEs) are estimated to receive AED 4.7 billion in investment during the pre-Expo phase, which will support approximately 12,600 job-years.
- According to Jones Day analysts, the Expo 2020 will generate approximately US $23 billion (AED 84.5 billion) for the emirates, which is equal to 24.4 % of Dubai’s GDP between 2015 and 2021. Jones Day analysts reached these figures by calculating the total estimated spend by the government, participants, visitors and general commercial activity related to the event.
- Jones day report also predicts that, over the next six years, the UAE could attract as much as US$100 billion to US$150 billion in foreign direct investment across a range of industry sectors, including financial services, infrastructure, construction, real estate, hospitality, tourism, and transportation.
- The event organizers predict that during the peak six-month period of the World Expo 2020, the largest event to be held in the Arab World is predicted to add the equivalent of 1.5 % to UAE Gross Domestic Product.
Expo 2020 to Spur UAE Economic Growth to 4.5%:
The Expo 2020 will be a big push for the UAE economic growth which is under 2% in 2020. The experts predict that Expo 2020 will take UAE economic growth to new heights with GDP growth surging to 4.5% over the next few years.
Expo 2020 will have a favorable impact on the job market and create a pool of opportunities in every sector such as real estate, property management, infrastructure, travel, tourism, engineering, development, and architecture.
A Big Push for UAEs Real Estate Sector:
Real estate gurus predict that Expo 2020 Dubai will expedite the pace of growth of the UAE real estate market. The rising interest of Chinese and Indian investors due to lucrative government policies is indeed great news for the UAE real estate sector as well as for the property management firms.
According to the Arabian Post, so far, Expo 2020 planners awarded 47 ok construction contracts worth AED 11 billion to organize the event. Expo 2020 Dubai will also boost the average price of the residential properties in Dubai in the range of AED 1,000 to 12,000 sq. ft.
The real estate experts expect a vast transformation to take place in Dubai property value and sales amid Expo 2020 Dubai. The ‘Expo effect’ will lead to sold-out hotel rooms and stimulate the job market. The grand event will ensure that the UAEs real estate sector thrives despite market fluctuations such as declining oil prices, the introduction of VAT, and the recessionary phase due to Covid 19.
Expo 2020 will foster tourism in Dubai which will result in a surge in occupancy rate, boosting the short-term rental market. The government expects this momentum even after April 2021, banking on its new visa reforms and other favorable schemes.
Concurrently, the property market is also expected to meet the demand-supply gap on the back of affordability in both sales and rentals.
In addition, the Dubai Land Department (DLD) can play a prominent role in the growth of real-estate industry as it looks forward to contemplating tokenization of real estate units. This will open doors for foreign investors and induce price-stabilization. The Expo 2020 will be graced with the presence of affluent venture capitalists, real-estate aficionados, and potential expats offering Dubai an auspicious opportunity to showcase all it has to offer on a global stage. Along with residential properties, commercial developments are also being planned in the allocated 1.5 million square feet area, with IKEA and Ace Hardware already established in Dubai South and Siemens.
The Expo 2020 event is expected to boost the real estate sector in UAE due to positive investor sentiment and a surge in economic activities. The event will be a major push for the residential property prices in Dubai which are on a downward trend since 2017.
Expo 2020 is expected to add more than 60,000 new properties to the market before its launch. The sector will also have a profound impact of favourable government policies such as – easing of ownership and visa regulations, over recent months. This will work wonders for the real estate industry and create even more favourable conditions for real estate growth and development. The grand event will have a favorable impact on the prices and will attract more investment in the near future.